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BenefitsLink
Retirement Plans
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December 9, 2003 - 13,525 subscribers
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Practical Tips & Strategies for Managing an Employee on FMLA Leave

An Interactive Audio Conference, December 17, 2003, 2:00 – 3:30 p.m. ET

A recent Society of HR Management survey found that half of all HR
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who have taken FMLA leave? Join us for this interactive presentation,
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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)
House of Representatives Snubs Senate-Proposed Pension Relief
Excerpt: "Chances for billions of dollars in proposed pension relief for troubled U.S. airlines and other companies this year dimmed on Monday as the House of Representatives headed home for the holidays without acting on a deal proposed by the Senate. Each chamber has been hoping the other would break the stalemate that has developed in pension policy ..." (Reuters via Forbes.com)

United Airlines Hopes for Pension Funding Relief from Congress
Excerpt: "United Airlines, in urgent need of pension relief before it can emerge from bankruptcy, was hoping for a key legislative victory in Washington on Tuesday, exactly one year after it filed the largest Chapter 11 filing in aviation history." (AP via Washington Post)

Memo Shows MFS Funds Let Favored Clients Trade When Others Couldn't
Excerpt: "MFS Investment Management, the oldest mutual fund company in the country, allowed privileged clients to trade quickly in and out of its biggest funds while saying it restricted the practice for the vast majority of its shareholders, according to a memorandum from a senior company executive." (New York Times; one-time registration required)

Mutual Fund Probe Spreads: Massachusetts Financial Services
Excerpt: "The owners of the nation's oldest mutual fund company, Massachusetts Financial Services Co., said yesterday that they expect the firm to be charged with fraud by the Securities and Exchange Commission for allegedly lying to investors about widespread short-term trading in MFS mutual funds." (Washington Post)

Trustees of Large Pension Funds Call for Board Changes at Putnam Parent Company
Excerpt: "The pension funds will seek access to Marsh & McLennan's proxy to nominate and elect independent directors, pending approval by the Securities and Exchange Commission of a new rule governing shareholder access to corporate proxies." (AP via Boston.com)

Opinion: It's the Fund Expenses, Stupid; Illegal Timing, Trading Are Distractions
Excerpt: "Three cheers for the timing and trading charges brought by state attorneys general. But those charges are not the real problem folks ... expenses are the big killer. Fund expenses cost investors $72 billion annually versus a mere $5 billion in damage done by the illegal trading schemes, says Jack Bogle." (CBS Marketwatch)

Opinion: How the Mutual Fund Industry Manipulated Washington
Excerpt: "[T]he [Investment Company Institute, or ICI] has built its clout by claiming to speak for millions of shareholders with their 401(k)s, college funds, and personal savings.... But in reality, the ICI represents the companies that create, run, and sell funds. When the interests of fund managers and fund investors have clashed, the ICI has almost invariably sided with the managers.... A humbled SEC has been shocked into action." (Business Week)

Resolving Competing Correction Principles under EPCRS
Excerpt: "A client with several thousand employees recently discovered that it had made matching contributions in a manner that conflicted with the plan's written terms.... [T]he amount of the 'excess' match was substantial, and the client wanted to recover it if possible.... The traditional correction for this type of violation is for the improper matching contributions to be forfeited from participant accounts and used in accordance with a plan's forfeiture provisions ..." (Reish Luftman Reicher & Cohen)

New York State United Teachers Benefit Trust Responds to 403(b) Criticisms
Excerpt: "The opinion recently expressed in [403bWise] about the 403(b) variable annuity, Opportunity Plus, which is endorsed by New York State United Teachers (NYSUT) Benefit Trust, ignores pervasive 403(b) industry concepts. The NYSUT Benefit Trust is also being confused with NYSUT, the Union. The Benefit Trust would like to set the story straight." (403bWise.com)

Minnesota Workers to See Cuts In Pension Following Investment Losses
Excerpt: "At least 10,000 Minnesota workers will see their pension benefits slashed in the future as the Teamsters Central States Pension Fund-- the nation's second-largest union pension plan-- struggles to manage heavy investment losses.... Judy Mazo, a multi-employer pension fund expert in Washington, D.C., described the Central States Pension Fund as 'absolutely squeaky clean' since it began operating under government oversight in 1982." (Knight Ridder Newspapers via CentreDaily.com)

Another Question is Answered in the Davis-Bacon Act Q&A Column
A construction company that performs Davis-Bacon work, has a Davis-Bacon Plan and a 401(k) profit sharing plan. Can the company exclude the Davis-Bacon workers from participating in the 401(k) profit sharing plan altogether? If not, ) can the company exclude the Davis-Bacon wages from compensation considered in the 401(k) profit sharing plan? The office staff is unhappy that the Davis Bacon workers are getting benefits under both while they do not. (BenefitsLink.com)

IBM, Plaintiffs Argue Over Amount Owed as Damages in Cash Balance Pension Case
Excerpt: "Armonk, N.Y.-based IBM said in a court filing that plaintiffs in the case had asked for what amounted to $6.5 billion, a sum it termed 'unreasonable and completely unsupported by the law.' The filing was the latest step in a high-profile case that has been seen as a testing ground for cash-balance pension plans, a hybrid retirement vehicle that combines elements of traditional plans with 401(k)s." (USA Today)

IBM Facing ERISA Section 510 Claims
Excerpt: "The article notes how an IBM employee allegedly compiled data showing that older workers at IBM were being terminated at rates that exceeded those of their younger worker counterparts." (Attorney B. Janell Grenier on BenefitsBlog)

IRS Publishes Change to Instructions for Forms 1099-R and 5498 for 2003 and Later (PDF)
1 page; regarding the distribution code used in Box 7. Excerpt: "The Explanations for Codes J, Q, and T shown in the Guide to Distribution Codes for Roth IRA distributions has changed. If you have issued a Form 1099-R (or applicable substitute) for 2003 for a Roth IRA distribution, you may have to issue a corrected return based on the changes in the chart below.... The above changes will appear in the 2004 Instructions for Forms 1099-R and 5498." (Internal Revenue Service)

Avoiding QDRO Problems That Crop Up in the Future
Excerpt: "It is a good idea (and many attorneys do it) to provide your client a written, jargon-free, explanation of the terms of the settlement and have them sign that before they sign the agreement.... Unless you are a board certified tax attorney, do not give out any advice as to the tax implications of the retirement asset distribution.... Use an expert ..." (Paul R. Commerford on DivorceNet.com)

DOL Proposed Rules for Electronic Registration of ERISA Investment Managers (PDF)
7 pages. Excerpt: "Under the proposed regulation, in lieu of filing a copy of their state registration forms with the Secretary of Labor, state-registered investment advisers seeking to obtain or maintain investment manager status under Title I of ERISA would have to electronically register through the Investment Adviser Registration Depository (IARD) as an investment adviser with the state in which they maintain their principal office and place of business." (U.S. Department of Labor, Employee Benefits Security Administration)

More Companies Offer Financial Advice To Workers
Excerpt: "The late, great bull market made investing seem easy. But the downturn in 2000 demonstrated that do-it-yourself pension saving, like fixing cars or plumbing, requires knowledge and practice. Experts are now conceding that many workers can't, or won't, learn to make investment decisions on their own." (Knight Ridder Newspapers via the Buffalo News)

How Can We Help Our Employees Understand How To Invest In Their Retirement Plan?
Excerpt: "Answer: Teach your employees the importance of Asset Allocation." (Financial Finesse via WorkIndex.com)


Links to Items on Executive Comp, Benefits in General

Reminder: December 31 Deadline for Split-Dollar Insurance Safe Harbor (PDF)
3 pages. Excerpt: "[F]or split-dollar life insurance arrangements that were in place on January 28, 2002, where the employer has received or is entitled to receive full repayment of all of its contributions, consideration should be given to (i) terminating the split-dollar arrangement by December 31, 2003 or (ii) for all periods that begin on or after January 1, 2004, treating all amounts paid by the employer to the policy since its inception as loans for federal tax purposes ..." (Morgan Lewis)


Newly Posted Events

In Search of Retirement Security: The Changing Mix of Social Insurance, Employee Benefits, and Personal Responsibility
in District of Columbia on January 22, 2004
presented by National Academy of Social Insurance

Global Medical Forum Summit: Is the U.S. Subsidizing the Global Pharmaceutical Market? A European Perspective
Nationwide on December 5, 2003
presented by Kaiser Family Foundation

Workers Compensation & Disability Management Conference
in California on January 28, 2004
presented by International Business Forum

West Coast Employers' Summit on Reducing Health Care Costs
in California on February 1, 2004
presented by International Business Forum

13th Annual Defined Contribution/401(k) Conference (East Coast)
in Florida on February 8, 2003
presented by International Business Forum

5th Annual U.S. Employers Summit on Healthcare Costs
in District of Columbia on April 12, 2004
presented by International Business Forum

The 5th Annual Evening Institute in Miami featuring Legal and Illegal 412i Plans
in Florida on January 6, 2004
presented by The 412(i) Company
Newly Posted Press Releases

Coffey to Serve as President of the International Society of Certified Employee Benefit Specialists Governing Council
(IFEBP (International Foundation of Employee Benefit Plans))

Hewitt Study Shows Employers Critically Concerned with Health Care Costs and Looking for Creative Solutions
(Hewitt Associates LLC)

The WEB Network Issues RFP for Accounting Services
(Worldwide Employee Benefits Network (WEB))

Alliance Benefit Group Lauded For 401(k) Plan Services; Plan Sponsor Magazine Survey Gives Local Provider High Marks
(Alliance Benefit Group)

PBGC restates Administration support for prompt passage of interest rate relief
(Pension Benefit Guaranty Corporation (PBGC))

Assist America Offers Assistance Services to Florida Medical Association PLUS™ Members
(Assist America)

Labor Department Proposes Rule To Simplify Registration by Investment Managers
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

U.S. Retiree Income in 2030 Will Be $45 Billion Short of Need; But Saving Added 5% of Income Could Protect Many Future Retirees
(Employee Benefit Research Institute (EBRI))

Companies With 401K Plans Use Manual on Investments as a Benefit for Employees
(Sankin & Associates)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)

Beverly Mize (Sentinel Benefits)

Dan Shapiro (Sentinel Benefits)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401(k) Administrator
for Caribbean Pension Consultants, Inc.
in FL

Health Management Consultant
for Hewitt Associates
in NJ

Actuarial Consultant, Healthcare
for Hewitt Associates
in CT, MA

Employee Benefits Trust Administrator
for BB&T
in NC

ERISA Litigation Attorney
for Marvel Consultants, Inc.
in GA

Client Services Representative
for PAi
in NV, WI

Retirement Plans Administration Specialist
for Union Central
in OH


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