| BenefitsLink Retirement Plans Newsletter |   |
September 23, 2003 - 13,400 subscribers
Today's sponsor: ASPA
(Click on company name or banner to learn more.)
ASPA Restructures Education Program As a result of exam candidate feedback and more than two years of research, analysis, and planning, ASPA has restructured its education program. Effective January 2004, study material will be presented in smaller segments, in a more logical, easier-to-understand way. While the program is changing, ASPA assures professionals that the same high educational standards for which ASPA is known will not change. This fall exam cycle (November 1-December 15) is your last chance to take exams under the current structure. Register before September 30 and take advantage of the early registration discount. Click on the banner above or visit http://www.asppa.org/edu/restructure.htm for more information.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
New Products Are Designed To Ensure That Retirees Won't Run Out of Money
Excerpt: "For decades, financial firms made a mint helping baby boomers save for retirement. Now, with those customers graying fast, firms are plotting how to make money from the boomers' inevitable next step: Drawing down their nest eggs." (Wall Street Journal via Houston Chronicle)
Overview: Plans Can Provide Profiles Instead of Prospectuses in Most Cases Under ERISA 404(c)
Excerpt: "With respect to the regulation's requirement that 404(c) plans provide a prospectus to participants upon request, the Advisory Opinion states the plan can provide a Profile if that is the fund's most recent prospectus. But if a participant specifically asks for a 10(a) prospectus, the plan must provide the most recent 10(a) prospectus to satisfy this requirement." (Deloitte & Touche's Human Capital Advisory Services)
Overview: DOL Approves Use of a Mutual Fund Profile to Comply With ERISA Section 404(c)
DOL Advisory Opinion 2003-11A (Sept. 8, 2003). Excerpt: "In this Advisory Opinion, the DOL found that a mutual fund 'Profile' could be used to comply with the requirement in the ERISA 404(c) regulations that a fiduciary provide a prospectus to a participant either immediately before or immediately following the participant's initial investment in the fund." (EBIA Weekly)
Jitters Haven't Swayed Fans of 401(k) Plans
Excerpt: "[M]any Americans are sticking with their 401(k) accounts, according to a new study by the Profit Sharing/401(k) Council of America, even though many investors likely have watched their balances shrivel since 2000." (Newsday)
Too Much Choice Causes Lower 401(k) Plan Participation
Excerpt: "Offering employees lots of investment choices in a 401(k) plan actually leads to lower participation, according to a study by Columbia University's Sheena Iyengar in cooperation with The Vanguard Center for Retirement Research." (PLANSPONSOR.com; one-time registration required)
Opinion: In Defense of 403(b) Hold Harmless Agreements
Excerpt: "Many employers are requiring hold harmless agreements from any investment vendor providing mutual funds or annuity contracts within their 403(b) retirement plan. Is this a fair requirement or an artifice created by insurance companies to protect a traditional insurance market?" (Mark H. Fischer, CFA on 403bWise.com)
ERIC Position Paper: Replacement of the 30-Year Treasury Bond for Pension Regulation (PDF)
4 pages. Excerpt: "Changing the law from the 30-year Treasury bond to a composite rate of conservative corporate bond indices merely imposes a rational measure of pension liabilities-- it does NOT allow employers to escape from their pension funding obligations." (ERISA Industry Committee)
Towers Perrin U.S. Legislative Tracking Charts: Retirement
September 18, 2003. (Towers Perrin)
Another Question is Answered in the Davis-Bacon Act Q&A Column
We have a company where only some of the employees work Prevailing Wage Jobs. It has two profit sharing plans. Plan #1 includes all employees (including HCE's); contributions are made on a nondiscriminatory basis, but compensation is limited to non-prevailing wage employment. Plan #2 covers only employees with Prevailing Wage Income; the contribution is limited to the allowable contribution for fringe benefits. There are no HCEs in Plan #2. Any nondiscrimination and coverage problems? (BenefitsLink.com)
Investment Education Concerns Lessened If Plan Offers 'Lifestyle' Funds?
Excerpt: "Answer: No matter what types of funds you offer, participants still require investment and retirement planning education on topics on such as diversification, asset allocation, and dollar-cost-averaging in order to integrate fund options into their overall retirement plan. As a plan fiduciary, it is important to provide investment education and information to help participants evaluate the benefits and risks of Lifestyle funds before making their selections." (Financial Finesse via Workindex.com)
Overview: Plan Allocations Must Comply with the Definite Written Program Requirement
Excerpt: "Can you find/allocate profit sharing/employer discretionary contributions more frequent (i.e., quarterly) than annually even though your plan document allocation date is only annual?" (Reish Luftman & Reicher)
Overview: FASB Proposal Would Increase Pension Plan Disclosure Requirements
Excerpt: "The Financial Accounting Standards Board (FASB) has recently issued a proposed statement that would increase the disclosure requirements of employers maintaining defined benefit pension plans and other postretirement benefit plans." (CCH News & Information Library)
A Primer on the Mutual Fund Scandal
Excerpt: "[T]his major crisis for the fund industry has failed to inspire much fury from investors, and it has done little to halt a rising stock market. Maybe a partial explanation is that the fund companies allegedly did wrong, and why it hurt shareholders, is difficult to understand." (Business Week)
Senators Debate About Social Security
Excerpt: "Lawmakers are trying to bring debate back to the Senate floor, tackling the nation's most urgent issues with good, old-fashioned oratory." (AP via the Washington Post)
Links to Items on Executive Comp, Benefits in General
Survey: Most Plan To Work Into 70s
Excerpt: "The image of American retirees lounging by the pool or playing golf may disappear as nearly three-quarters of older workers say they plan to work past the traditional retirement age, a study issued Tuesday said." (Reuters via Money.CNN.com)
Communicating Benefit Changes: Do it Right or Risk Getting Burned
Excerpt: "The corporate landscape is littered with problems and bad headlines stemming from proposed benefit changes that blew up on the companies that made them." (Workforce.com)
Overview: FASB Delays Timetable on Stock Compensation Project (PDF)
4 pages. Excerpt: "The FASB on September 10, 2003 tentatively decided to delay its stock compensation project timetable by one quarter, with the release of an Exposure Draft and final standard now most likely to occur in the first and third quarters of 2004, respectively. The FASB also decided to address stock-based transactions with nonemployees and employee stock ownership plans (ESOPs) in a later 'second phase' of the project." (Frederick W. Cook & Co., Inc.)
Overview: Final Split Dollar Regulations Issued
Excerpt: "these final regulations will apply to split dollar arrangements entered into after September 17, 2003, and arrangements entered into on or before September 17, 2003 that are materially modified after September 17, 2003. There was some question after the release of the proposed regulations on what would be considered a material modification. The final regulations provide a 'non-exclusive list' of changes that will not be considered a material modification." (TaxFacts FX)
The Future of Employee Benefits: a Call for Reform
Originally published in the summer of 2002. Excerpt: "This article reviews some of the critical impediments to ERISA's continued success and summarizes a number of possible reform measures. The basic theme of this article is that it is now time for the key constituencies to review and evaluate the basic ERISA framework and how it can be improved or restructured to best balance the interests of employees and employers in the 21st century." (Aon Consulting)
Newly Posted or Renewed Job Openings
401(k)/DC Account Manager
for CNA Trust
in IL
Medical Benefits Program Director
for Management Recruiters of Wildwood
in NJ
401k Sales Representative
for Management Recruiters of Wildwood
in MI
Pensions Specialist
for Nationwide Retirement Consulting Group
in OH
Benefits Consultant
for Health Net
in CA
Newly Posted Webcasts
(Post Yours!)
Administration Before and After the QDRO
on November 18, 2003
presented by ASPA
Newly Posted Conferences
(Post Yours!)
P&I Defined Contribution 401(k) / West Coast Conference
in CA
October 12, 2003
Pensions&Investments/International Business Forum
Workers Compensation and Disability Management
in CA
January 28, 2004
International Business Forum
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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