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February 4, 2004 - 13,655 subscribers
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Pension Funding Bill On Ice As Parties Haggle
Excerpt: "A key Senate Republican warned on Tuesday that Democrats risked forfeiting billions in pension relief for U.S. companies if they continued to block negotiations on a final version of the legislation." (Reuters via Forbes.com)
Pension Plans Still Imperiled
Excerpt: "[C]orporations and taxpayers still face years of rising subsidies to fund the checks promised to those retirees who enjoy old-fashioned guaranteed pensions instead of personal retirement accounts." (The Philadelphia Inquirer)
Spiraling Pension Costs Slam Corporate Earnings
Excerpt: "[A] rising stock market is giving pension fund assets a much needed boost, but pension costs continue to skyrocket and pummel profits, thanks to accounting rules designed to spread costs over several years." (Reuters via Forbes.com)
Weighted Average Interest Rate Update for February 2004 (PDF)
1 page. Weighted average for February 2004: 5.23% (Internal Revenue Service)
Bush Budget Has Tax Incentives for Saving
Excerpt: "The president's 2005 budget asks Congress to consolidate a myriad of retirement savings accounts into two types, one for individuals and one for employees. Taxpayers would be permitted to put up to $5,000 each year into their individual retirement savings accounts and into a lifetime savings account, which could be tapped for any reason. Bush had previously proposed that individuals be allowed to put as much as $7,500 into each account." (AP via Washington Post)
Savings Plans Redux
Excerpt: "This time last year, President Bush unveiled a radical plan to overhaul the way Americans save for retirement.... Now they're back, slightly revised but no less controversial." (SFGate.com)
Administration's Revised ERSA Proposal is 'Better' But Doubts Linger
Excerpt: "[A]side from the potential siphoning effect, the new Employer Retirement Savings Accounts (ERSAs) have several features of keen interest to plan sponsors. Treasury has agreed to retain the current-law cross-testing, average benefit percentage testing, and permitted disparity rules in place without modification ..." (PLANSPONSOR.com; one-time registration required)
Mutual Funds Association: Retirement Savings Reforms Sound Good to Us
Press release. Excerpt: "The mutual fund industry strongly supports the Bush Administration's proposals to create Lifetime Savings Accounts and Retirement Savings Accounts. The President has combined bold innovations with needed simplifications. The proposals represent a significant advance and a true milestone." (Investment Company Institute)
American Benefits Council Urges Plan Sponsors to Write or Email SEC; Sample Letter Provided
Excerpt: "The Council has prepared a letter for plan sponsors to the Securities and Exchange Commission (SEC) with regard to its 'hard 4 p.m. close' proposal. We are asking plan sponsors to send copies of this letter to the SEC at rule-comments@sec.gov." (American Benefits Council)
ERIC Response to Administration's Legislation for Cash Balance Plans
Excerpt: "In its initial analysis, ERIC supported provisions in the proposed legislation that affirm recognition that cash balance plans are not age discriminatory and that disavow the notion that two interest rates must be used to compute a cash balance benefit (i.e. the whipsaw theory). ERIC urges immediate passage of these provisions." (ERISA Industry Committee)
Pennsylvania Judge: County Retirement Fund Trustees Can't Pay Attorney Fees from Fund
Excerpt: "Attorney John Moses has won the fight to prevent the Luzerne County Retirement Board from using any more money from the county pension fund to pay legal fees to pursue a federal civil racketeering suit." (TimesLeader.com)
Overview: New Law Affects Employers' Benefit Obligations for Reservists (PDF)
3 pages. Excerpt: "On December 19, 2003, President Bush signed the Servicemembers Civil Relief Act into law. The new law revises, clarifies and extends some of the protections and benefits available to reservist employees called to active military service. In particular, the new law emphasizes that the maximum 6% interest rate is not automatic and must be requested by reservist employees. This rate applies to certain debts (e.g., plan loans) incurred before a call-up to active military duty." (Mellon's Human Resources & Investor Solutions)
Withhold Taxes on Distribution to Deceased IRA Owner's Nephew?
Excerpt: "Question: One of our IRA owners died leaving his entire traditional IRA to his nephew. The nephew wants to take a total distribution. Do we withhold income taxes or is he on his own at tax time? Answer: As a traditional IRA custodian/trustee you are a payer required to provide any IRA owner, or beneficiary after an owner's death, with IRS Form W-4P ... prior to his/her receiving a distribution." (Compliance Headquarters)
PBGC Disaster Relief Announcements for Virginia, California, American Samoa
Issued Jan. 30: Disaster Relief Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Virginia; Disaster Relief Relating to PBGC Deadlines in Response to California Earthquake; Disaster Relief Relating to PBGC Deadlines in Response to Tropical Cyclone Heta in the Territory of American Samoa. (Pension Benefit Guaranty Corporation)
Oldest Baby Boomers Should Be Getting Finances in Order
Excerpt: "As baby boomers approach retirement, many are taking steps to ensure they're ready financially. Those on the leading edge of the baby boom turn 58 this year, and experts say it's a good time to start gathering financial records and adopt strategies for spending their money after they stop working full time. For some it also means thinking about part-time jobs or volunteer positions for their retirement years." (AP via Washington Post)
Massachusetts Pension Fund Might Fire Fidelity; Performance at Issue, Not Scandals
Excerpt: "The pension fund does not fire managers often but takes action if performance suffers or there is turnover among the managers charged with investing the money." (Reuters via Washington Post)
California Governmental Pension Funds Urged To Go Green
Excerpt: "California Treasurer Phil Angelides said Tuesday that he will ask California's two major pension funds to invest $1.5 billion in environmentally minded companies and mutual funds." (Sacramento Bee)
Overview: DC Plans May Charge Former Employees for Administrative Expenses (PDF)
3 pages. (Dechert LLP)
Federated Fires Employee Over Trades
Excerpt: "Federated Investors Inc. said on Tuesday it fired an employee involved in improper trading of its mutual funds and set up a $7.6 million fund to reimburse investors." (Reuters via New York Times; one-time registration required)
Opinion: Behind the Scandals-- Men at Work
Excerpt: "Recent business scandals have less to do with corrupt individuals than a narcissistic-- and male-- organizational culture." (Shoshana Zuboff in Fast Company)
Are Americans Saving "Optimally" for Retirement?
Excerpt: "Our standard for assessing optimality comes from a life-cycle model that incorporates uncertain lifetimes, uninsurable earnings and medical expenses, progressive taxation, government transfers, and pension and social security benefit functions derived from rich household data.... Ours is the first study to compare, household by household, wealth predictions that arise from a life-cycle model that incorporates earnings histories for a nationally representative sample." (National Bureau of Economic Research)
Means Testing for Social Security (PDF)
4 pages. Excerpt: "Among these proposed reforms is reducing or eliminating benefits for wealthy and/or high-income participants and beneficiaries, generally characterized as 'means testing.' Advocates of means testing note that reducing or eliminating benefits for those whose income or assets exceed certain thresholds would help preserve Social Security as a safety net for those who truly need it. This proposal raises some important issues ..." (American Academy of Actuaries)
Assumptions Used to Project Social Security's Financial Condition (PDF)
8 pages. Excerpt: "This issue brief describes the major assumptions used in projections of Social Security's financial condition and how variations in the assumptions affect the results. The issue brief also encourages policy advocates to disclose the assumptions underlying their reform proposals and to apply assumptions consistently." (American Academy of Actuaries)
Social Security and Unsecured Debt
Excerpt: "Most young households simultaneously hold both unsecured debt on which they pay an average of 10 percent interest and social security wealth on which they earn less than 2 percent.... We show that both allowing households to use social security wealth to pay off debt and exempting young households from social security contributions (but in both cases requiring higher contributions later in life) leads to increases in welfare for both types of households ..." (National Bureau of Economic Research)
Links to Items on Executive Comp, Benefits in General
Funeral Notice for ERISA Attorney Michael S. Gordon
Includes a link to an online guest book that will be shared with Mike's family; please add your regards if you wish. (Washington Post)
National Retiree Legislative Network Board Members Mourn Passing of Retiree Advocate Michael Gordon
Press release. Excerpt: "Retirees and older citizens across the country lost a good friend and defender of pension and health care benefits on Feb. 1 with the passing of Michael S. Gordon, according to Jim Norby, president of the National Retirees Legislative Network (NRLN). Gordon served as general counsel and chief legislative strategist for the NRLN ..." (National Retiree Legislative Network)
Massachusetts High Court Rules for G*y Marriage
Excerpt: "The Massachusetts high court ruled Wednesday that only full, equal marriage rights for g*y couples -- rather than civil unions -- would be constitutional, erasing any doubts that the nation's first same sex marriages would take place in the state beginning in mid-May." (AP via Chicago Tribune; one-time registration required)
Ohio Legislature Votes to Ban Same-Sex Unions
Excerpt: "The Ohio Legislature gave final approval on Tuesday to one of the most sweeping bans on same-sex unions in the country, galvanized by court rulings in Canada and Massachusetts that have declared g*y marriage to be legal." (New York Times; one-time registration required)
Lessons for ERISA Fiduciaries from a Ninth Circuit Case
Excerpt: "Make sure your plan document has the 'magic' language of the Firestone case.... In questions of ambiguity or areas needing clarity, seeking the advice of counsel can help to establish that the plan fiduciaries employed 'prudent procedures' ... Remember that informal discussions among committee members memorialized through emails may eventually be used against the committee members ..." (Attorney B. Janell Grenier on BenefitsBlog)
Overview: Senate Finance Committee Adopts COLI Amendment
Excerpt: "Companies that purchase company-owned life insurance (COLI) in the name of an employee would be required to acquire the employee's written consent under an amendment adopted by the Senate Finance Committee (SFC) on February 2." (CCH Tax News)
Opinion: Teachers, Don't Let State Lawmakers Take Your DB Plan or Retiree Health Coverage Away
Excerpt: "Even if you're not knocking on the door of retirement, it's worth reflecting on the value of your pension--and fighting to preserve it--because many policy makers are pushing changes that would put your retirement security at risk.... 'We need to be vigilant,' adds Jim Sproul, president of NEA-Retired, 'or the pillars of retirement that our members count on-- a good pension with cost-of-living increases, as well as health coverage-- won't be there when they need them.'" (NEA Today)
Opinion: the Debt No One Wants to Talk About
Excerpt: "The federal government's gross debt -- the accumulation of its annual deficits -- was about $7 trillion last September, which works out to about $24,000 for every man, woman and child in this country. But that number excludes items like the gap between the government's Social Security and Medicare commitments and the money put aside to pay for them. If these items are factored in, the burden for every American rises to well over $100,000." (David Walker in the New York Times; one-time registration required)
Who Bears the Burden of Social Insurance? Evidence from Japanese Health and Long-Term Care Insurance
19 pages. (National Bureau of Economic Research)
Newly Posted Events
Introduction to ESOPs
in Wisconsin on June 1, 2004
presented by National Center for Employee Ownership
7th Annual HR Technology Conference & Exposition
in Illinois on October 13, 2004
presented by Human Resource Executive Magazine
Newly Posted Press Releases
William F. Brown, Esq., Joins DATAIR’s Legal Staff
(DATAIR Employee Benefit Systems, Inc.)
Newly Posted or Renewed Job Openings
Project Manager
for Transamerica-The Winning Organization
in CA
Communications Strategist
for CitiStreet - A State Street & Citigroup Company
in MA
Senior Compensation/Classification Analyst (Labor Analyst)
for King County Human Resources
in WA
Employee Benefits Attorney
for Oxford Legal Associates, LTD
in NJ
Pension Administrator
for xélan, The Economic Association of Health Professionals
in CA
Manager, Recordkeeping & DC Administration
for Third Party Administrator
in MI
Employee Benefits Support
for Trust Department, western Colorado community bank
in CO
Actuarial Associate
for xélan, The Economic Association of Health Professionals
in CA
Retirement Plan Specialist
for Diversified Investment Advisors
in MI
Benefit Advisor
for The Protector Group Insurance Agency, Inc.
in CT, MA, NH, RI
Benefits Analyst
for Maersk Sealand
in NJ
Account Executive - Client Relationship Management
for Diversified Investment Advisors
in CA
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