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February 12, 2004 - 13,655 subscribers
Today's sponsor: Actuarial Systems Corporation
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ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS ASC provides complete automation for the pension office, including: DC/401(k) and DB administration and valuation systems, sophisticated Compliance Testing, DV Direct Daily Valuation, Advanced Information Manager Database (AIM), and Single-Step Processing. All ASC Technical Support Members were experienced Pension Administrators or Actuaries before joining ASC -- and most have been with ASC for over 10 years.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Bill Shuts Texas Teachers' Social Security Loophole; Will Bush Sign?
Excerpt: "The House approved and sent to the president a bill to close a loophole in federal law that allows Texas teachers to keep their own state pensions and the full Social Security benefits of deceased spouses. The bill, which cleared the House 402-19, was designed to crack down on fraud by people who manage the affairs of Social Security beneficiaries unable to keep track of their own finances." (Houston Chronicle)
Notes from February 2004 Mid-Atlantic Pension Liaison Group Meeting
Excerpt: "The Mid-Atlantic Pension Liaison Group met yesterday in Philadelphia. In attendance were practitioners from the Mid-Atlantic region as well as Vicki Surguy (Area II Determinations Manager from Cincinnati) ... Surguy provided the following updates: (1) She confirmed that Paul Schultz will be leaving the IRS in March. (2) As many of you know, Dick Wickersham left the IRS last year. His replacement will be Marty Pippins...." (Attorney B. Janell Grenier on BenefitsBlog)
Statement of Administration Policy on the 'Pension Funding Equity Act' (PDF)
Excerpt: "The Administration supports prompt Senate passage of H.R. 3108, the Pension Funding Equity Act. The Administration supports the interest rate provisions in the bill, which are consistent with the transitional portion of the Administration proposal for more accurate discounting of pension liabilities. The Administration also supports the provision in H.R. 3108 that calls for comprehensive funding reform to protect the benefits American workers have earned." (White House)
Text of DOL Amicus Brief in Stock Sale Case Involving Earlier Prohibited Transaction Exemption (PDF)
14 pages; Unaka Co. Inc. v. Newman (M.D. Tenn. No. 2:99-CV-267; brief dated 1/29/04). Excerpt: "The Secretary is the federal officer charged with interpreting and enforcing the provisions of ERISA involved in this action. As such, the Secretary has significant interests in the proper application of the safeguards Congress established through ERISA for the administration of employee benefits plans and the protection of participants in those plans." (U.S. Department of Labor, Office of the Solicitor)
PowerPoint File of NAGDCA Presentation: Mutual Funds in Crisis-- Issues for Plan Sponsors
428k in size; a free Microsoft PowerPoint Viewer is available for persons running Windows 98 Second Edition or later Windows versions, at http://www.microsoft.com/downloads/details.aspx?FamilyId=428D5727-43AB-4F24-90B7-A94784AF71A4&displaylang=en (National Association of Government Defined Contribution Administrators)
Overview: IRS Illustrates Coverage Transition Rule
Excerpt: "The IRS has released Rev. Rul. 2004-11, describing how the 'coverage transition rule' of Code ยง 410(b)(6)(C) applies to the nondiscrimination requirements of 401(a)(4)." (SunGard Corbel)
SunGard Corbel Publishes Updated Summary of Material Modifications for Plan Expenses
Excerpt: "An updated version of our sample Summary of Material Modifications (SMM) regarding the payment of plan expenses is posted on our Web site. This SMM takes into account the DOL guidance issued in Field Assistance Bulletin 2003-3, which permits a plan to charge the account of a particular participant for certain plan expenses incurred by or attributable to that participant." (SunGard Corbel)
Financial Liability for the Troubled Multiemployer Pension Plan
Excerpt: "Multiemployer pension plans are subject to liabilities imposed by ERISA and the Internal Revenue Code, including excise tax; withdrawal liability; and continuing financial responsibilities upon plan termination, reorganization or insolvency. These duties are designed to ensure the plans stability and ability to pay benefits." (Attorney George M. Kraw)
Do 401(k) Plans Still Need Mutual Funds?
Excerpt: "Some plan sponsors jettisoned mutual funds long before the current scandal ... particularly those with large 401(k) plans that had sufficient assets to negotiate more attractive pricing from institutional money managers.... However, institutional accounts of that sort are generally not available to smaller plans [with] neither the in-house expertise to oversee institutional money managers independently nor sufficient assets to qualify for their best institutional pricing." (PLANSPONSOR.com; one-time registration required)
Financial Plans Selling for In-House Gains?
Excerpt: "John Haritos Jr. was looking to cut his tax bills and save for retirement when he agreed to a free financial consultation with American Express Financial Advisors. Told his finances wouldn't allow him to meet his retirement goals, Mr. Haritos, 37 years old, paid $500 in July 2000 for a financial plan. Recalls Mr. Haritos: 'I figured I was paying for ... unbiased advice.' He now says he figured wrong." (Wall Street Journal via SFGate.com)
U.S. Chamber of Commerce Comments on Proposed SEC Late Trading Rule (PDF)
6 pages; 2/6/2004. Excerpt: "The proposed amendment significantly disadvantages retirement plan participants by relegating the majority of them to next-day trading status." (U.S. Chamber of Commerce)
SEC Moving To Reduce Conflicts At Mutual Funds
Excerpt: "Federal regulators took steps yesterday to reduce conflicts of interest at mutual funds and to improve the information given to investors." (Chicago Tribune via Baltimore Sun)
Sears To Reduce Pension Costs By Moving Workers To 401(k) Plan, Cutting Retiree Medical Subsidies
Sears, Roebuck & Company has announced that it is implementing changes to its retirement and retiree medical plans intended to make it more competitive with other retailers and to 'ensure that the benefits provided by the plans are the most appropriate for today's work force.' In 2003, Sears showed a liability of more than $1.9 billion for pension and postretirement benefits. (Spencer Benefits Reports)
Links to Items on Executive Comp, Benefits in General
IRS Launches Web Page on Abusive Tax Shelter Schemes Involving Employee Retirement Plans
Press release. Excerpt: "In the new section, the IRS identifies so-called 'listed transactions' involving employee retirement plans. It also provides recently issued guidance -- such as Treasury regulations and IRS revenue rulings -- intended to shut down transactions the IRS deems abusive." (Internal Revenue Service)
American Airlines Moves to Save Golden Parachute
Excerpt: "AMR Corp., parent of American Airlines, is fighting a proposal that would require shareholders to sign off on lucrative severance agreements for top executives if the company is acquired. The proposal was filed in December by John Chevedden, a small investor and shareholder activist in Redondo Beach, Calif. He wants AMR shareholders to have a say in whether the company offers the agreements -- called 'golden parachutes' -- to top executives." ([Fort Worth] Star-Telegram)
International Legal Equity Plans: a Legal Update (PDF)
Excerpt: "In June of 2003, the World Law Group released its publication entitled International Employee Equity Plans: Participation Beyond Borders ... This comprehensive book analyzed the legal implications with respect to offering stock to employees in over 30 countries.... [W]e have created this newsletter to briefly highlight for you law changes in various countries since the book's release and to demonstrate the World Law Group's proactiveness in the global stock area." (World Law Group via Gardner Carton Douglas LLP)
Overview: COLI Legislation Taxes Benefits, Mandates Employee Consent
Excerpt: "Federal legislators have hammered out a bill regarding corporate-owned life insurance (COLI) that, while it adds a layer of consent to the sales process, still is acceptable to life insurers and brokers." (BenefitNews.com)
Newly Posted Events
401(k) Plan Workshop - New Format! - Additional Location
in Washington on March 3, 2004
presented by SunGard Corbel
ERISA Litigation
in Illinois on May 13, 2004
presented by ALI-ABA (American Law Institute-American Bar Association)
Newly Posted Press Releases
IRS Launches Web Section on Abusive Tax Shelter Schemes Involving Employee Retirement Plans
(Internal Revenue Service (IRS))
GILSBAR, Inc. to Provide Health Plan Administration for The Stockmen's Anchor
(Gilsbar, Inc.)
Northwest Airlines Honored by Assist America for Outstanding Customer Service
(Assist America, Inc.)
Newly Posted or Renewed Job Openings
Account Service Representative, Employee Benefits
for Fred C. Church Insurance
in MA
Senior Pension Administrator/Consultant
for Thomas, Doll & Company, CPAs
in CA
Manager, Retirement Services
for Retirement Financial Services Company
in ME
Project Manager PEO-MEP
for Transamerica
in CA
Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ
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