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December 4, 2003 - 13,525 subscribers
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Payroll Tax Developments & Year-End Issues for Benefits Managers

An Interactive Audio Conference, December 11, 2003, 2:00 – 3:30 p.m. ET

The end of the year is approaching which means that soon it will be time
to report on 2003!  During this audio conference, attorneys Jerry Holmes,
Janine Cook, and David Fuller of the international law firm of McDermott,
Will & Emery will address the issues, new trends and end-of-year strategies
payroll managers, controllers, and corporate financial department personnel
should be aware of in the weeks to come.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
S.E.C. Proposes Rules to End Late Trading in Mutual Funds; 4 p.m. Cutoff
Excerpt: "The commission voted unanimously to propose a rule aimed at ending abusive late trading by imposing a strict 4 p.m. cutoff for trades. Any trades received by a fund, its transfer agent or clearing agency after 4 p.m., Eastern time, would have to receive the price at the end of the next trading day." (New York Times; one-time registration required)

Forbes Coverage: Crackdown At the Mutual Fund Casbah
Excerpt: "At times, today's SEC session had elements of that famous scene in the movie Casablanca where the police chief played by Claude Rains professes shock at the presence of gambling even as he collects his winnings. One SEC official after another denounced recent revelations, the topics of which have been the subject of articles and gossip for years." (Forbes.com)

Washington Post Coverage: SEC Issues Proposed Rule to Curb Mutual Fund Trading Abuses
Excerpt: "The five-member commission voted unanimously to propose a rule that all buy-and-sell orders for mutual fund shares be submitted to fund companies by 4 p.m. each day.... The proposed rule will go out for a 60-day comment period after which it will take several months for the SEC to analyze those comments and vote on a final rule." (Washington Post)

LA Times Coverage: SEC Attacks Mutual Fund Abuses
Excerpt: "Some have argued that the strict deadline would put at a disadvantage investors who own mutual funds through an intermediary such as a 401(k) retirement plan or a fund 'supermarket' such as Schwab. It can take hours for intermediaries to process and bundle trades before sending them on to the fund companies -- meaning that a much earlier deadline could be set for these investors, especially those on the West Coast." (Los Angeles Times; one-time registration required)

American Benefits Council: SEC Proposed 4 p.m. Cutoff Will Hurt Retirement Plan Participants
Press release. Excerpt: "By insisting on a hard and fast 4:00 p.m. trade cut-off, this rule would penalize 401(k) and other retirement plan participants over other investors due to the processing procedures required for retirement plan transactions. Workers and retirees will now be sliding backwards from today's ability to protect their retirement assets immediately, like any other investor, to as long as a three day wait for 401(k) trades to be processed." (American Benefits Council)

The Fewer Fund Choices, the Better
Excerpt: "According to a growing body of academic research, if employees are deluged with too many mutual fund choices, it all becomes too much for them to handle. They can become prematurely risk-averse or unable to choose among 401(k) fund offerings, reverting instead to 'plain vanilla' investing decisions--or not joining up at all." (HR Magazine)

Retirement Financial Management: Who's to Blame?
Excerpt: "Responding to the public criticism, various guardians of the public trust (including the SEC, FASB, accounting firms, and bond rating agencies) now have pension plans squarely in their sights. They are competing with one another to see who can change the rules first to bring pension accounting into the bright sunshine." (Mercer Human Resource Consulting)

Needed Pension Funding Fixes Might Not Come
Excerpt: "At issue is a provision expiring at the end of the year that allows companies to peg their payments to their pension funds to 120 percent of the market value of the 30-year Treasury bond, which is no longer issued." (Washington Times)

Fiduciary Breach Claim Against Investment Advisor Was Filed Too Late
Wright v. Heyne (6th Cir. 2003). Excerpt: "The issue before the Sixth Circuit in this case was whether the trustees of an ERISA retirement plan waited too long before suing the plan's investment advisor for fiduciary violations. ERISA Section 413 imposes a 'statute of limitations,' under which a claim for fiduciary breach must be filed within the earlier of (1) six years after the breach; or (2) three years after the plaintiff obtained 'actual knowledge' of the breach." (EBIA)

CalPERS Trustees Ride Again
Excerpt: "The scourge of corporate slackers is back, with an ambitious leader and a controversial new agenda." (Fortune)

Baby Boomers' Retirement Prospects: An Overview
Excerpt: "Nearly all of the studies reviewed in this report assume that Social Security and other government benefits will be paid as prescribed by current law. However, budgetary pressures could result in lower benefit levels in the future. Because many baby boomers are likely to depend heavily on government benefits for the bulk of their income in retirement, their prospects may be less rosy than recent studies imply." (Congressional Budget Office)

Don't Let Your Pension Plan Discourage Older Workers
Excerpt: "Older workers sometimes are forced to retire and go to work for another company, even through their original employer would benefit from their staying." (Workforce Management; one-time registration required)

Opinion: Fees Are the Real Mutual Fund Rip-Off
Excerpt: "[T]he far more consequential -- but perfectly legal -- rip-off is the bevy of bloated fees that fund firms charge to manage your money. These range from loads (hefty commissions doled out to brokers or financial advisers for selling you a fund) to fees that cover advertising, marketing and distribution costs for the funds (known as 12b-1 fees)." (Time magazine)

Analysis: Spitzer, OCC Issue Corporate Death Penalty
Excerpt: "The mutual fund investigations have now gone nuclear.... The regulators slapped Security Trust and its top executives with civil and criminal charges connected to helping hedge funds make 'illegal mutual fund' trades. Security Trust is accused of masking those trades through pension plans it controls on behalf of several different hedge funds, including the much-maligned Canary Capital. And then sharing in the profits." (Registered Representative)

Overview: Mutual Fund Investigations Raise Plan Fiduciary Concerns (PDF)
4 pages. (Mellon's Human Resources & Investor Solutions)


Links to Items on Executive Comp, Benefits in General

Benefit Cuts Anger Teamsters; Many at UPS Affected
Excerpt: "The Central States division will drop the long-cherished pension policy that allowed members to retire after 25 or 30 years with guaranteed benefits, regardless of age. Sharp increases in out-of-pocket costs for health benefits for new retirees younger than 62 will also make early retirement unaffordable, say critics of the benefit cuts." (The [Louisville, KY] Courier-Journal)

How Employee Stock Options Can Influence the Value of Ordinary Shares
Excerpt: "What effect do options have on the number of stock shares a company has in circulation? The answer can make a big difference when a company computes its earnings per share, and when investors calculate the critical price-to-earnings ratio." (Wharton School of the University of Pennsylvania)


Newly Posted Events

Wrapping Up 2003 and What to Expect in 2004
Nationwide on December 16, 2003
presented by Retirement Capital Group
Newly Posted Press Releases

CDs and Handouts Available for Distance Learning Seminars
(IFEBP (International Foundation of Employee Benefit Plans))

Funding Issues Still a Major Concern for Many Pension Funds
(IFEBP (International Foundation of Employee Benefit Plans))

Are You Effectively Measuring Your Disease Management Program
(IFEBP (International Foundation of Employee Benefit Plans))

Empliant Offers Free 90-day Online Survey Trial
(Empliant, Inc.)

ClaimsFusion Launches ClaimsFusion (Cardless) Transaction Settlement System
(ClaimsFusion LLC)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Retirement Plan Administrator
for InWest Pension Management, Inc.
in TX

Director, Benefits Administration
for Mount Carmel Health
in OH

Business Analyst (27327BR)
for Cigna
in IA

Retirement Plan Conversion Consultant
for Wachovia Corporation
in MN, NC

Inst Trust Sales Associate
for BB&T (Branch Banking & Trust Co.)
in GA

Actuary
for The Angell Pension Group, Inc.
in RI


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