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November 21, 2003 - 13,525 subscribers
Today's sponsor: APSCREEN, Employee Locator
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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)
Market Timing and Late Trading: Outline of Issues Affecting Employee Benefit Plans
Excerpt: "Employee benefit plans are heavily invested in mutual funds and may be required to take some action in response to market timing and late trading problems in the mutual fund industry. Groom Law Group has developed an outline of ERISA issues relating to market timing and late trading abuses." (Groom Law Group)
The Mutual Fund Scandal: What Should Plan Sponsors Do? (PDF)
2 pages. Excerpt: "[K]eep records of the decision-making process and document it. You can expect some participants to ask you about this scandal, and you want to able to show your understanding of the basic issues. Also, begin to think about what steps you will take if the situation gets worse." (Blue Prairie Group)
Putnam Fired As Manager of Washington State Fund
Excerpt: "The exodus of public pension funds from Putnam Investments continued yesterday as the Washington State Investment Board said it would replace the Boston-based fund company as manager of $584.6 million of international stock investments. More than 10 state pension funds, including Massachusetts and Oregon, have said they're pulling money from Putnam ..." (Boston Globe)
A Band-Aid for the Fund Industry's Broken Leg?
Excerpt: "What is the best way to fix what is wrong with mutual funds? The House of Representatives has offered a grab bag of options in a bill approved on Wednesday. But the bill may not sufficiently address the short-term trading abuse at the heart of the scandals that have come to light since September." (New York Times; one-time registration required)
Founders of Pilgrim-Baxter Funds Charged With Illegal Trading
Excerpt: "Many people long involved with the industry said they were disturbed by accusations that such well-regarded executives saw nothing wrong with profiting at the expense of their investors." (New York Times; one-time registration required)
Spitzer Sees Fund 'Death Penalty'
Excerpt: "New York Attorney General Eliot L. Spitzer yesterday told the Senate Banking Committee he would not hesitate to bring criminal charges against companies enmeshed in the widening mutual fund scandal, even if it drives them out of business." (Washington Post)
Text of House-Passed Bill Addressing Pension Interest Rate (PDF)
10 pages; H.R. 3521, approved 11/20/03; a similar bill in the Senate does not address pension interest rates, so a conference committee might produce a version that retains or modifies the House bill provisions. (U.S. House of Representatives)
Actuaries Ask Congress for More Assistance on Interest Rate Issue Before Adjournment (PDF)
Excerpt: "The stopgap provision in the Job Creation and Workers Assistance Act of 2002 that created a temporary pension discount rate to replace the discontinued 30 year Treasury rate expires on December 31." (American Academy of Actuaries)
House Passes Bill Easing Airline Pension Funding Rules
Excerpt: "The House of Representatives approved a bill yesterday that would allow airlines with severely underfunded pension plans to defer for the next two years 80 percent of the cash contributions they would otherwise be required to make to bring their plans up to full funding." (Washington Post)
UAL Defends Pension Position
Excerpt: "UAL Corp. on Thursday responded defensively to a New York Times article that raised questions about the carrier's ability to make its required pension contributions and to finance its business operations at the same time." (Crain's Chicago Business)
ERIC Writes Senators, Representatives Seeking Deletion of Provision Stopping IRS Regs Finalization (PDF)
1 page. Excerpt: "An amendment added to the Transportation-Treasury appropriations bill (H.R.2989) will endanger the pension benefits of over 7 million American workers. The amendment must be modified before the bill is enacted. The amendment has the practical effect of calling into question the legality of over 1200 hybrid design (cash balance) pension plans." (ERISA Industry Committee (ERIC))
Liability for Employer Stock Holdings: Litigation Update
11/20/03. Excerpt: "Over the course of the last two years, more than a dozen lawsuits have been filed challenging the investment of defined contribution plan assets in the stock of the employer. The most noteworthy of these lawsuits, of course, is the one brought by the participants in the plans sponsored by Enron Corporation." (Groom Law Group)
Actuary's Report Details $7 Million Cost of Philadelphia's Deferred Retirement Option Program
Excerpt: "A deferred retirement program that allows veteran city workers to receive lump-sum payments of up to $550,000 is costing the city roughly $7 million annually, the city's Pension Board learned yesterday." (The Philadelphia Inquirer)
Bid to Change Social Security is Back
Excerpt: "President Bush's aides are reviving his long-shelved plan to let workers divert some Social Security taxes into stocks as a reelection issue, gambling that market drops have not soured voters on the politically risky idea." (Washington Post)
Links to Items on Executive Comp, Benefits in General
Will Small Business Pay Disproportionate Price of Stock Option Accounting Reform?
Excerpt: "[P]roposed accounting standards would force all businesses to expense stock options provided to employees. The rule change comes in the wake of the big corporate scandals last year. Yet small businesses may end up paying the price for this controversial 'reform' enacted to clean up the actions of a few bad players." (Money Center via bizjournals.com; one-time registration required)
Text of DOL's Reporting and Disclosure Guide for Employee Benefit Plans (PDF)
19 pages. Excerpt: "It is intended to be used as a quick reference tool for certain basic reporting and disclosure requirements under [ERISA]. Not all ERISA reporting and disclosure requirements are reflected in this guide. For example, the guide, as a general matter, does not focus on disclosures required by the Internal Revenue Code or the provisions of ERISA for which the Treasury Department and Internal Revenue Service have regulatory and interpretive authority." (U.S. Department of Labor, Employee Benefits Security Administration)
IRS Targeting S Corporations Paying Distributions in Lieu of Wages
Excerpt: "S corporation shareholders might naturally prefer to receive cash from their corporations as distributions instead of wages, so as to avoid employment taxes such as FICA and FUTA. The IRS has long maintained its ability to recharacterize distribution payments as the payment of wages, thereby subjecting that payment to associated employment taxes." (The CPA Journal)
Hey, What's Up with the G*y and H*mose*ual Asterisks?
Several readers asked why the BenefitsLink Newsletter contains asterisks in the middle of certain words, such as yesterday's issue that contained links to articles about the Massachusetts decision on the legality of g*y marriages. We do this only because email "filters" set up by many corporations where our readers work otherwise would "bounce" the email newsletters back to us undelivered ... the filters scan emails for certain words that they believe indicate the message is from a "spammer." (BenefitsLink.com)
Newly Posted or Renewed Job Openings
Group Health Underwriter/Benefits Specialist
for Hufnell, Inc , recruiters in Benefits Outsourcing and Employee Benefits
in PA
Pension Administrator
for Small TPA Firm
in GA
Pension Consultants/Administrators
for Northern New Jersey Mid-Size Pension Consulting Firm
in NJ
Qualified Plan Administrator
for Pension Advisory Group, Ltd.
in IL
Newly Posted Events
2nd Annual Disease Management Summit for Employers, Providers, and Health Plans
in District of Columbia on April 22, 2004
presented by CBI
3rd Annual Employer Summit on Healthcare Costs and Quality
in New York on May 17, 2004
presented by CBI
World Health Care Congress's U.S. Leadership Forum to Transform Health Care Costs and Quality
in District of Columbia on January 26, 2004
presented by World Congress
Newly Posted Press Releases
(Post Yours!)
Labor Department Issues Reporting And Disclosure Guide for Employee Benefit Plans
(U.S. Department of Labor, Employee Benefits Security Administration)
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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