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February 19, 2004 - 13,655 subscribers
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IBM Loses Another Round in Cash Balance Litigation
Excerpt: "IBM Corp. owes back payments-- possibly worth billions of dollars-- to 140,000 older employees who were harmed when the technology giant converted to a new kind of pension plan in the 1990s, a federal judge has ruled." (AP via Washington Post)
Text of Latest Order in Cooper v. IBM Case (PDF)
3 pages. Excerpt: "IBM argues that under City of Los Angeles, Department of Water and Power v. Manhart, 435 U.S. 702 (1978), retroactive relief to the [plaintiff employee] class is not appropriate." (U.S. District Court for the Southern District of Illinois, via ERISA Industry Committee)
Promoting Work at Older Ages: the Role of Hybrid Pension Plans in an Aging Population
Excerpt: "This paper examines the growth in hybrid pension plans ... [and] documents how population aging is transforming the labor market ... The paper then considers how improvements over time in health status and declines in the physical demands of work increase work capacity at older ages. [It] examines how retirement incentives differ between hybrid plans and traditional DB plans, and ... offers conclusions." (Urban Institute)
Overview: Treasury Proposes Legislation Approving Cash Balance Pension Plans Prospectively
Excerpt: "The proposal is contained in the President's 2005 budget message to Congress, and no actual statutory language has been published yet. Treasury is proposing that Congress address cash balance plans in three ways:" (BNA Tax Management)
IRS Publishes Brief Layperson's Summary of 401(k) Plans
Excerpt: "IRC 401(k) plans are the most popular type of retirement plan used today. They can be a powerful tool in promoting financial security in retirement and are a valuable option for businesses considering a retirement plan, providing benefits to employees and their employers." (Internal Revenue Service)
Opinion: Treasury's Proposed Cash Balance and Pension Equity Plan Legislation is Mixed Bag
Excerpt: "Treasury's proposed legislative solution to end the current limbo status of hybrid plans has some aspects that are very good and others that are worse than we expected. It's clear that the Bush administration has worked hard to fix some of the biggest problems facing the 1,200 hybrid plan sponsors, and for that we are deeply appreciative. Unfortunately, some of the best pension policy recommendations in the Treasury proposal are side-by-side with some of the most problematic." (Watson Wyatt)
Divorce Decree Entitled Debtor's Former Wife To IRA Proceeds, According To First Circuit
A divorce judgment entitled a debtor's former wife to the proceeds of the debtor's individual retirement account even though the IRA was in the debtor's name at the time he filed for bankruptcy. This was the ruling of the First Circuit U.S. Court of Appeals in Davis v. Cox (Nos. 02-1962 and 02-1963). (Spencer Benefits Reports)
Overview: DOL Responds to Corporate Fraud Litigation With Prohibited Transaction Relief
Excerpt: "The DOL has finalized prohibited transaction exemption (PTE) 2003-39, which provides both prospective and retroactive relief for plans that settle pending or threatened litigation." (Employee Benefits Institute of America (EBIA))
Text of American Bankers Association Comments to SEC on Proposed 4 p.m. Hard Close Rule (PDF)
5 pages; dated February 13, 2004. Excerpt: "We continue to strongly oppose a mandatory 4 p.m. hard close. A 4 p.m. hard close to the mutual fund or its agents disadvantages investors by denying them the choice of distribution channels and limiting their investment options." (American Bankers Association)
City of Denver Mulls Change in Retirement Benefit Formula
Excerpt: "Currently, the retirement payment is calculated based on the employee's highest pay rate for 36 consecutive months, the employee's number of years working for the city and a 'multiplier' of 2 percent. Administrators of the retirement plan on Wednesday recommended reducing the multiplier to 1.5 percent." (Denver Post)
Towers Perrin Legislative Tracking Chart as of Feb. 17, 2004: Retirement Issues (PDF)
11 pages. (Towers Perrin)
The Employee Plan Team Audit Program: IRS Targets Large Employer Plans
Excerpt: "The IRS, through audits, wants to provide the greatest protection for the largest number of plan participants. The IRS has limited sources, thus fewer audits have been conducted over the last years. There are approximately 4,400 single employer qualified plans with 2,500 or more participants, representing 1% of the universe but having 60% of the total plan participants and holding over 70% of total plan assets." (Southern Employee Benefits Conference)
ACLI Comments on Proposed 412(i) Regs
Press release. Excerpt: "The guidance issued Feb. 13 by the U.S. Treasury Department and Internal Revenue Service addressing the use of life insurance policies in retirement plans will not have a large effect on the 412(i) market. Section 412(i) plans are tax-qualified retirement plans funded by life insurance contracts or annuities. Our members' initial read of this guidance is that most plans will not run afoul of what the IRS has indicated it is trying to limit." (American Council of Life Insurers)
Guide to SEC Proposed Repeal of 12b-1 Fees (PDF)
2 pages. Excerpt: "The 12b-1 fee is an annual percentage charge (typically 25 basis points [0.25%], but can be as high as 100 basis points) that is embedded in a fund's annual expense ratio." (Foundation for Fiduciary Studies)
Understanding the Retirement Prospects of Baby Boomers
70 pages. Excerpt: "In absolute terms, measured by real per capita income and poverty rates, we find that baby boomers will be better off than current retirees. In relative terms, however, many baby boomers will be worse off than current retirees." (Center for Retirement Research at Boston College)
Links to Items on Executive Comp, Benefits in General
Overview: SEC Issues Interpretive Guidance on Item 201(d) Equity Compensation Plan Information Table
Excerpt: "In response to an American Bar Association request for guidance, the SEC recently issued interpretive guidance and clarifications addressing equity compensation plan disclosure issues under Regulation S-K, Items 201(d) and 601(b). The SEC's interpretive guidance and clarifications included: ..." (Perkins Coie)
California Grocery Strike Over Employee Benefits Takes Huge Economic Toll
Excerpt: "The economic fallout of the Southern California grocery strike -- now in its 19th week -- continues to mount. While negotiations are under way to bring the strike to an end, the financial impact on union workers, supermarkets and the region's economy may be long lasting. Supermarket chains have lost over $1 billion in sales. Hear Erik Anderson of member station KPBS." (National Public Radio)
Towers Perrin Legislative Tracking Chart as of Feb. 17, 2004: Human Resources Issues (PDF)
7 pages. (Towers Perrin)
Older Employees Expected To Fill Key Shortages
Excerpt: "Experts are warning that strategic benefit designs need to mature as quickly as America's rapidly aging work force if employers want to stay competitive in the labor market." (BenefitNews.com)
Program Eases Retirees Back to Work Force
Excerpt: "'The older generation has a good work ethic,' said John Governor, program director at Mid-Cumberland Community Service Agency in Nashville. 'They care about being productive and want to work. They tend to have less absenteeism than younger workers and lower turnover.'" (AP via Washington Post)
Newly Posted Events
Retiree Health Benefits Now and in the Future
Nationwide on February 18, 2004
presented by Hewitt Associates LLC
HIPAA Privacy: The Final Days Before Compliance
Nationwide on March 2, 2004
presented by ABA Joint Committee on Employee Benefits
Mutual Funds in Crisis: The Prudent ERISA Fiduciary's Response
Nationwide on March 9, 2004
presented by ABA Joint Committee on Employee Benefits
WEB Benefits Boot Camp
in Georgia on March 3, 2004
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter
Health and Welfare Plan Management for Mid-Sized Employers
in Florida on February 29, 2004
presented by University Conference Services
Health and Welfare Plan Management for Mid-Sized Employers
in Illinois on June 6, 2004
presented by University Conference Services
Mid-Sized Pension Management Conference
in California on March 14, 2004
presented by University Conference Services
Mid-Sized Pension Management Conference
in Massachusetts on April 27, 2004
presented by University Conference Services
Mid-Sized Pension Management Conference
in Illinois on October 3, 2004
presented by University Conference Services
Health Savings Accounts: More Momentum for Consumer-Driven Plans?
Nationwide on February 26, 2004
presented by Benefit Partners, Inc.
Practical Application of the Retirement Distribution Rules: What Practitioners Must Know
Nationwide on February 2, 2004
presented by West LegalEdcenter
Newly Posted Press Releases
ASEC Joins National Organizations To Sponsor Sixth Annual National Consumer Protection Week
(American Savings Education Council (ASEC))
Newly Posted or Renewed Job Openings
Account Manager (Retirement Services)
for SunTrust Bank
in VA
Trust Accounting Administrator
for Associated Pension Consultants
in CA
Administrative Service Associate
for The Senex Group (Woodland Hills, California)
in CA
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