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October 30, 2003 - 13,383 subscribers
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Senate HELP Committee Approves Pension Funding Relief Bill
Excerpt: "Relief for companies complaining of skyrocketing pension costs cleared another hurdle in Congress on Wednesday, with a Senate panel approving a three-year interest rate adjustment that would let businesses pay less into their workers' retirement plans." (AP via SFGate.com)
American Benefits Council Cheers Senate HELP Committee Approval of Pension Interest Rate Bill
Press release. Excerpt: "The Pension Stability Act, sponsored by Committee Chairman Judd Gregg (R-NH), replaces the outdated 30-year Treasury bond rate currently used for a variety of pension funding calculations. Today's bill would substitute that outdated and inaccurate rate with a new measure based on conservative, long-term corporate bond rates for three years beginning in 2004." (American Benefits Council)
ERIC Strongly Endorses Gregg-Kennedy Pension Funding Bill
Press release. Excerpt: "The ERISA Industry Committee (ERIC) [on October 29, 2003] strongly endorsed legislation proposed by Senate Health, Education, Labor and Pensions Committee Chairman Judd Gregg (R-NH) and Ranking Democrat Ted Kennedy (D-MA) that calls for a three-year replacement of the defunct 30-year Treasury bond rate with a corporate rate and would establish a commission to develop long-term defined benefit pension plan reform over the next two years." (ERISA Industry Committee)
GAO Testimony: Changing Funding Rules and Enhancing Incentives Can Improve Pension Funding
Written testimony provided by Barbara D. Bovbjerg, director, education, workforce, and income security issues, before the House Committee on Education and the Workforce. GAO-04-176T, 10/29/03. (U.S. General Accounting Office)
GAO Report: Single-Employer Pension Insurance Program Faces Significant Long-Term Risks
60 pages. Excerpt: "[G]iven the long-term nature of the financial risks to PBGC's single-employer insurance program, the Congress should consider a comprehensive response that includes changes to strengthen plan funding and improve the transparency of plan information as well as consider proposals to modify program guarantees. In addition, PBGC's premium structure should be re-examined to see whether premiums can better reflect the risk posed by various plans to the pension system." (U.S. General Accounting Office)
Administration Pushes Active Pension Reform Agenda Into 2004
Excerpt: "The Bush Administration plans on an active agenda of pension reform issues into 2004, said officials from the Pension Benefit Guaranty Corporation (PBGC), the Internal Revenue Service (IRS) and the Treasury Department who spoke Oct. 27 at the annual conference of the American Society of Pension Actuaries in Washington, D.C." (Thompson Publishing Group)
Massachusetts Treasurer to Recommend Moving State Pension Funds Away from Putnam Investments
Excerpt: "Massachusetts Treasurer Timothy P. Cahill today will recommend that the state pull $1.7 billion out of Putnam. The burgeoning scandal involving frequent market-timing trades by Putnam money managers, including one who supervised Massachusetts' investments, 'brings into question the ethical standards and compliance procedures at Putnam,' Cahill said." (Boston Globe via NewsAlert.com)
Long Island Union Included in 'Market Timing' Complaint
Excerpt: "Members of a Boilermakers Union local in Floral Park made so many short-term trades in Putnam Investments' mutual funds that some employees of the Quincy, Mass.-based financial firm dubbed the 60 minutes before the 4 p.m. closing of the U.S. stock market the 'boilermaker hour,' Massachusetts regulators said yesterday.... Market timing can increase funds' transaction costs and hurt other fund owners' returns in additional ways." (Newsday.com)
Is Mutual Fund Deck Stacked Against Small Investors?
Excerpt: " Funds are supposed to treat all investors alike.... [Market timing] is illegal if a fund's prospectus forbids the practice and the fund company allows insiders or other favored investors to do it. 'Of the 88 fund groups contacted by the SEC, as many as half of them appear to have had at least one arrangement to allow someone to time their funds,' [SEC enforcement chief Stephen Cutler] says." (USA Today)
California Outgoing Governor's Signing of Pension Bills Raises Questions
Excerpt: "Two bills recently signed into law by Gov. Gray Davis would benefit public safety unions that have contributed millions of dollars to his campaigns-- but could add significant new costs to cash-strapped local governments." (Los Angeles Times; one-time registration required)
Early Retirement Program Adds to Illinois' Liability
Excerpt: "Last year's early retirement program will cost state government an extra $380 million a year for the next nine years, trustees of the State Employees' Retirement System were told Tuesday. The cost of the early retirement program more than doubled the amount of state funding needed for the system to meet its obligations." (PJStar.com)
IRS Received 140,000 Determination Letter Applications in 2003
Excerpt: "Plan determination letters seem to be descending on the Internal Revenue Service (IRS) in droves, but the IRS appears to be handling the volume-- and is continuing to issue determination letters on some cash balance plans." (PLANSPONSOR.com; one-time registration required)
How to Conduct a Request for Proposals from 403(b) Vendors
Excerpt: "What are the right questions to ask when conducting an RFP?" (403bWise.com)
Workers' ESOP Buys Buffalo, N.Y. Company
Excerpt: "For the first time since Ferguson Electric opened its doors since 1935, a member of the Ferguson family will not head the company. The company's workers have bought the electrical contractor through an employee stock ownership plan (ESOP)." (The Buffalo News)
Overview: Final Regulations on Public Section 457 Plans (PDF)
2 pages. Excerpt: "In general, the final regulations apply immediately and are retroactive to tax years beginning after December 31, 2001. However, until taxable years beginning in 2004, plan sponsors may still operate the plan in accordance with a good-faith interpretation of Internal Revenue Code (IRC) ยง457(b)." (The Segal Company)
Nevada OKs Social Security Replacement Plan for Part-Time Employees
Excerpt: "A plan that will save the state an estimated $460,000 a year and switch new part-time state workers into a new retirement system was approved by the state Board of Examiners Tuesday. Part-time state employees now are not enrolled in the state Public Employees Retirement System, but the state matches the 7 1/2 percent the employees pay to Social Security." (Las Vegas Sun)
Links to Items on Executive Comp, Benefits in General
FASB Picks 2005 to Begin Mandatory Expensing of Stock Options
Excerpt: "Accounting rule makers voted to begin requiring companies in 2005 to charge stock-option costs against earnings, among a slew of decisions that are putting into shape a closely watched bookkeeping change. The new standard, which would mandate expensing stock-option awards just like any other form of compensation, is to be proposed for public comment by the Financial Accounting Standards Board in February. A final rule is expected to be formally issued in the second half of 2004." (Dow Jones Business News via Yahoo! News)
Export Tax Subsidy Repeal Bill Would Impact Retiree Health and Executive Compensation
Excerpt: "[T]he proposed mark by Ways and Committee Chairman William Thomas (R-CA) to The American Jobs Creation Bill of 2003 (H.R. 2896) would: extend for 5 years the ability of an employer to transfer excess defined benefit plan assets to retiree health accounts ... [and] clarify that a stock option is not subject to payroll tax when the option is exercised ... [and more]." (CCH News & Information Library)
Text of Joint Committee on Taxation's Description of H.R. 2896, 'American Jobs Creation Act of 2003' (PDF)
159 pages. Excerpt: "Treatment of nonqualified deferred compensation plans [sec. 1061 of the bill]; Exclusion of incentive stock options and employee stock purchase plan stock options from wages [sec. 1062]; Extension of provision permitting qualified transfers of excess pension assets to retiree health accounts [sec. 1063] ..." (U.S. Congress, Joint Committee on Taxation)
Text of H.R. 2896 Approved by Ways and Means Committee, Affecting Nonqualified Deferred Comp Plans (PDF)
245 pages. Summary by the American Benefits Council (http://www.americanbenefitscouncil.org): 'The Ways and Means Committee has approved ... a corporate and international tax reform bill (H.R. 2896) that includes amendments to the rules governing nonqualified deferred compensation plans (Section 1061 of H.R. 2896). The provisions also similar to those contained in the National Employee Savings and Trust Equity Guarantee (NESTEG) Act approved by the Senate Finance Committee on September 17." (U.S. House of Representatives)
Newly Posted or Renewed Job Openings
Account Executive - Client Relationship Management
for Diversified Investment Advisors
in CA
Sales Director-401(k)
for BenefitStreet
in CA
Plan Compliance Manager
for Transamerica-The Winning Organization
in CA
Processor
for Hand Benefits & Trust Company
in TX
Assistant Manager Of Administration
for Retirement Alliance, Inc.
in NH
Senior Counsel
for Asset Management and Retirement Services Company
in FL
ERISA Attorney
for Stevenson Keppelman Associates
in MI
Newly Posted Conferences
(Post Yours!)
Qualified Retirement Plan Seminar
in ALL STATES
November 14, 2003
Global Benefit Advisors and Gray, Harris & Robinson, P.A.
Newly Posted Press Releases
(Post Yours!)
Profit Sharing/401(k) Council of America Votes In New Board Of Directors
(Profit Sharing/401(k) Council of America (PSCA))
Federal Pension Insurer Assumes Responsibility for Pillowtex Pensions
(Pension Benefit Guaranty Corporation)
The SPARK Institute Meets With SEC To Discuss Market Timing And Late Trading
(RG Wuelfing & Assoc.)
Labor Department Sues Executives of Indiana Marketing Firm For Failure to Prudently Manage Health Plan
(U.S. Department of Labor)
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