| BenefitsLink Retirement Plans Newsletter |   |
March 1, 2004 - 13,655 subscribers
Today's sponsor: Employee Benefits Institute of America Inc. (EBIA)
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The Country's Best 401(k) Plans Manual Questions about 401(k) plan administration or legal requirements? Need some sample forms? Look no further--EBIA is here to help! Our two-volume 401(k) Plans manual is a thorough, easy-to-use, and cost-effective solution. Written and edited by top employee benefits attorneys, our 401(k) Plans manual has over 1,700 pages packed with the information you need to answer your 401(k) plan questions. For more information, visit http://www.ebia.com
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Text of SEC Proposed Rule Prohibiting Use of Brokerage Commission to Finance Fund Distribution (PDF)
13 pages. Excerpt: "The [SEC] is publishing for comment amendments to the rule under the Investment Company Act of 1940 that governs the use of assets of open-end management investment companies ('funds') to distribute their shares. The amended rule would prohibit funds from paying for the distribution of their shares with brokerage commissions. The proposed amendments are designed to end a practice that is fraught with conflicts of interest and may be harmful to funds and fund shareholders." (U.S. Securities and Exchange Commission)
Joint Committee Describes 2005 Budget Provisions Related to Employer-Based Pension System (PDF)
29-page extract created by BenefitsLink. Full document is 428 pages, at https://benefitslink.com/articles/2005-budget-descrip.pdf (U.S. Congress Joint Committee on Taxation)
Contribution of Sick and Vacation Pay to Defined Contribution Plans (PDF)
Excerpt: "A convincing argument can be made that the recently adopted 457 regulations explicitly allow contribution of accrued sick and vacation pay to a 457 plan. The regulations state: ..." (National Association of Government Defined Contribution Administrators)
New Canadian Commuted-Value Standard for Pension Plans Released (PDF)
2 pages. Excerpt: "The Canadian Institute of Actuaries (CIA) has just issued a new 'Standard of Practice for Determining Pension Commuted Values.' It changes two important calculations for Canadian pension plans: the determination of transfer values for those who leave a plan's coverage and solvency calculations for funding and plan 'wind-ups' (i.e., plan terminations)." (The Segal Company)
Houston Faces $1 Billion Pension Shortfall; Taxpayers May Have to Foot Bill
Excerpt: "The city of Houston's main pension program has a billion-dollar funding shortfall because benefits have been boosted so high that many employees will earn more in retirement than they received while working, according to a report obtained by the [Houston] Chronicle. A few will retire as millionaires." (Houston Chronicle)
Some Say Houston Municipal Retirement Plan Unusually Generous, Costly
Excerpt: "The Houston Municipal Employees Pension System, which covers about 12,000 workers, offers benefits far more generous than those offered in Dallas, Phoenix, Denver and Philadelphia, the Houston Chronicle reported in Sunday's editions. The funding problems can be traced to 2001, when former Mayor Lee Brown's administration agreed to increase benefits ..." (AP via Click2Houston.com)
Opinion: California Governor's Proposed Change to State Pension Plan Needs Dose of Geritol
Excerpt: "Schwarzenegger wants to return new hires to the benefit levels state workers were getting before 1999, when the Legislature and former Gov. Gray Davis approved higher pensions and earlier retirement.... A solid reform ... would look not only for ways to reduce pension costs overall but to also end the perverse pattern that forces the state to contribute more at just that moment when the treasury has the least to spare." (Daniel Weintraub in the Sacramento Bee)
Smaller Airlines Unite to Oppose Pension Funding Relief for Bigger Companies
Excerpt: "[F]ive profitable low-fare carriers have banded together to oppose a move in Congress to help out the industry's giants, including bankrupt United Airlines. TIME has obtained a copy of a letter from the five airlines to the Bush Administration ..." (TIME Magazine)
IRS Employee Plan News Discusses New Tax Shelter Guidance, New Fees for Tech Requests (PDF)
2 pages; Special Edition, February 2004. (Internal Revenue Service)
Overview: New Order May Amend QDRO Payout Schedule, DOL Says
Excerpt: "A domestic relations order that alters a previous qualified domestic relations order (QDRO) with the same participant and alternate payee but different pension payment schedule is permissible under Section 206(d)(3) of the Employee Retirement Income Security Act (ERISA)." (PLANSPONSOR.com; one-time registration required)
Pensions Insured by Federal Government, But with Some Limits
Excerpt: "Traditional pension benefits owed to about 44 million workers and retirees are insured by the Pension Benefit Guaranty Corp., but only up to $44,386 per retiree this year. Companies cannot reduce earned pension benefits, but they can change health care benefits for retirees. The health care benefits are not insured by the government." (Atlanta Journal-Constitution via Miami Herald)
IRAs Turn 30 Years Old
Excerpt: "IRAs, which came into being as part of the 1974 Employee Retirement Income Security Act, are the granddaddy of today's tax-deferred retirement savings arrangements. Originally, they were designed for workers who didn't have any retirement plan at work -- and were open only to such folks ..." (Washington Post)
Some Investors Warming Up to Exchange Traded Funds
Excerpt: "Exchange-traded funds, or E.T.F.'s, are hybrid securities that have characteristics of both stocks and mutual funds. Like stocks, these funds trade on an exchange ... But, like those of traditional index funds, the shares represent a basket of dozens-- or even hundreds-- of securities ..." (New York Times; one-time registration required)
Text of ERIC Statement to Senate Banking Committee on Mutual Fund Trading
Excerpt: "The ERISA Industry Committee (ERIC) registered its objections to the Senate Committee on Banking, Housing and Urban Affairs on regulations proposed by the SEC that address late trading practices of mutual fund shares in a way that would discriminate against workers who save through an employer-sponsored 401(k) plan." (ERISA Industry Committee)
Redemption Fee Could Trap Small Investors
Excerpt: "Currently, about 10 percent of funds carry a 2 percent redemption fee, the amount that the SEC is proposing to take on trades made within five days. That's nearly double the percentage of funds that had such fees prior to the start of the scandals in September." (Boston Globe)
The Social Security Promise Not Yet Kept
Excerpt: "Since 1983, American workers have been paying more into Social Security than it has paid out in benefits ... Those taxes were imposed at the urging of Mr. Greenspan, who was chairman of a bipartisan commission that in 1983 said that one way to make sure Social Security remains solvent once the baby boomers reached retirement age was to tax them in advance.... So what has happened to that $1.8 trillion? The advance payments have all been spent." (New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Are All Consultants Corrupt?
Excerpt: "That's one possible conclusion in the wake of the Enron scandal. According to David Maister, who's been studying professional-services firms for more than 20 years, it's time to clear the air." (Fast Company)
New Ideas Draw Older Workers
Excerpt: "Baptist Health South Florida is beating the perennial hospital problem of unfilled jobs and high turnover by fine-tuning its policies and jobs to appeal to workers over 50." (Workforce.com)
Joint Committee Describes 2005 Budget Provisions Related to Individuals' Savings, Healthcare (PDF)
73-page extract created by BenefitsLink. Full document is 428 pages, at https://benefitslink.com/articles/2005-budget-descrip.pdf (U.S. Congress Joint Committee on Taxation)
Opinion: a Bribe By Any Other Name Smells As Rotten!
Excerpt: "Through their recent inquiry of investment consultants the Securities and Exchange Commission (SEC) has opened the door for potential regulatory activity targeted at addressing unseemly relationships in the investment community between gatekeepers and other service providers." (PLANSPONSOR.com; one-time registration required)
Why Do Americans Work so Much More Than Europeans?
Excerpt: "Americans now work 50 percent more than do the Germans, French, and Italians. This was not the case in the early 1970s when the Western Europeans worked more than Americans. In this paper, I examine the role of taxes in accounting for the differences in labor supply across time and across countries, in particular, the effect of the marginal tax rate on labor income." (National Bureau of Economic Research)
Newly Posted Events
A Vision for Tomorrow's Treasurer -- Managing the Financial and Fiduciary Risks of Retirement
in New York on March 23, 2004
presented by Hewitt Associates LLC
The Medicare Prescription Drug Improvement and Modernization Act and Its Impact on Corporate Plans
in Massachusetts on April 6, 2004
presented by International Society of CEBS - Greater Boston Chapter
Newly Posted Press Releases
Labor Department Proposes Rule To Preserve Retirement Savings
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
New York Life Insurance Company Agrees to Settle Class Action Lawsuit with Sales Agents
(New York Life Insurance Company)
Newly Posted or Renewed Job Openings
Retirement Actuarial Associate
for PricewaterhouseCoopers LLP
in IL
DC/401(k) Plan Administrator
for Fast paced. high quality and quickly growing DC plan administration company
in CT
Director of Compliance Services
for AMVESCAP Retirement, Inc.
in GA
Retirement Plan Sales Director-South-West Region
for First Mercantile Trust/ National Commerce Financial
in NM, OK, TX
Compensation - Associate/Senior Associate
for PricewaterhouseCoopers LLP
in IL
401(k) Client Service Representative
for ADP TotalSource
in FL
Employee Benefits Paralegal / Administrator
for Iris Bashi Associates, LLC
in NJ
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