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March 3, 2004 - 13,655 subscribers
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Overview: Business Owner May Be Plan Participant for Bankrup.tcy Protection Purposes, Court Rules
Excerpt: "The working owner of a business may be considered a participant in the business' Employee Retirement Income Security Act (ERISA)-governed retirement plan." (PLANSPONSOR.com; one-time registration required)
Overview: U.S. Supreme Court Decision Impacts Retirement Plans Involved In Bankrup.tcy Proceedings
Excerpt: "The question presented in Yates was whether a working owner of a business is an ERISA plan 'participant' and thus has the right to enforce the plan's anti-alienation provisions against a bankrup.tcy trustee. The Sixth Circuit had said no to this question in this 2002 decision. The Supreme Court issued an opinion today that said yes (in a 9-0 decision) so long as the plan covers one or more employees other than the business owner and his or her spouse." (Attorney B. Janell Grenier on BenefitsBlog)
Overview: Safe Harbor for ERISA Fiduciary Responsibility Pertaining To Automatic Rollovers
Excerpt: "[T]he DOL has issued proposed regulations providing this guidance and establishing a safe harbor pursuant to which a fiduciary of a pension plan subject to Title I of ERISA will be deemed to have satisfied his or her fiduciary responsibilities in connection with the [mandatory rollover] provisions [of EGTRRA]." (Attorney B. Janell Grenier on BenefitsBlog)
Overview: DOL Proposes Rule on Mandatory EGTRRA Rollover to IRA of 401k Assets
Excerpt: "The U.S. Department of Labor announced on March 1, 2004 a proposed rule that provides guidance on how employers and financial institutions can implement the requirement under EGTRRA that retirement plan distributions between $1,000 and $5,000 be automatically rolled over into an individual retirement plan unless the participant directs otherwise." (401kHelpCenter.com)
Notice 2004-24 Provides Weighted Average Interest Rate for March, 2004 (PDF)
1 page; 5.21%. (Internal Revenue Service)
Is It Time to Change Your Investment Return Assumption? (PDF)
At pp. 3-4 of 6-page document. Excerpt: "The investment return assumption is arguably the most influential assumption (or method) used in a defined benefit plan's actuarial valuations. It is intended to reflect the best estimate of the plan's long-term investment returns. However, investment experience between 2000 and 2003 raises the question of whether current investment return assumptions are still reasonable." (Gabriel, Roeder, Smith & Company)
Questions for State and Local Governments to Consider Before Issuing Pension Obligation Bonds (PDF)
At pp. 1-2 of 6-page document. Excerpt: "Interest in Pension Obligation Bonds (POBs) has grown among state and local governments in recent years, primarily due to historically low interest rates, the budgetary problems that many jurisdictions currently face, and declines in pension plans' funded ratios." (Gabriel, Roeder, Smith & Company)
American Benefits Council: Urge Congress to Complete Pension Interest Rate Bill
Excerpt: "[T]he House Leadership and the potential conferees on the pension rate replacement legislation need to hear from the leaders in the business community that the replacement of the 30-year Treasury bond interest rate is very urgently needed." (American Benefits Council)
The Questions Candidates Should Answer About Social Security Reform
Excerpt: "This guide has been written by the Academy's Social Insurance Committee for journalists, policy-makers, and voters to use as they evaluate candidates' proposals this election year." (American Academy of Actuaries)
Private Letter Ruling: Powerpoint OK for Notice of Reduction in Pension Plan Contributions
Click on 3/3/2004 on target page. Excerpt: " company's Power Point presentations to employees concerning a reduction in the employer's contribution rate to a money purchase pension plan constituted adequate and timely written notice of reductions in benefit accruals, the IRS has privately ruled." (CCH News & Information Library)
Overview: IRS Regulations Will Require 'Relative Value' Comparisons of Optional Forms of Benefit (PDF)
7 pages. Excerpt: "These requirements are effective for employees with annuity starting dates on or after October 1, 2004. Since information on optional forms of payment must be distributed in advance of annuity starting dates, the new comparisons will have to be delivered to affected employees as early as July 1, 2004. Few employers have provided relative-value comparisons of the type required by the new regulations." (Mellon's Human Resources & Investor Solutions)
Five Steps to IRA Required Minimum Distribution Nirvana
Excerpt: "Offer to help your clients and beneficiaries calculate their RMDs on all their IRAs and 401(k)s, including the accounts you do not currently manage. Just use my five-step IRA RMD process below for each IRA client subject to RMDs. Your clients will appreciate the high level of service and wonder why their other advisers never mentioned any of this to them.... The first thing that you need to know is April Fool's Day, which applies only to the first RMD." (Ed Slott on Financial-Planning.com)
Overview: Institutional Shareholder Services Policy Changes for 2004 (PDF)
3 pages. Excerpt: "Institutional Shareholder Services ('ISS') recently released changes to its 2004 policy guidelines for voting recommendations on proxy analyses for companies with meeting dates on or after February 1, 2004. The policy changes include various executive compensation related matters, the most significant of which concerns equity compensation plans and new CEO pay-for-performance guidelines." (Frederic W. Cook & Co., Inc.)
Pension Rule Changes Aided Top Houston Officials, Houston Chronicle Says
Excerpt: "The official in charge of negotiating changes in the city's pensions under Mayor Lee Brown nearly tripled his own retirement benefit through changes approved during Brown's six years in office." (Houston Chronicle)
Opinion: Budget, Deficit, Threatens Economic Freedom
Excerpt: "For the second consecutive year, politicized fears over the budget deficit will relegate a perfectly sound economic idea -- taxing savings only once -- to the budgetary abyss. The proposed accounts would consolidate the myriad retirement accounts (401(k)s, 403(b)s, Roth IRAs, etc.) and establish the Lifetime Savings Account (LSA)." (Norbert Michel, Ph.D. on Fox News)
Under the Gun, Mutual Funds Deploy a Novel Defense
Excerpt: "No harm, no foul. So say some mutual-fund companies in response to allegations that they allowed certain traders to improperly buy and sell fund shares." (Wall Street Journal via SFGate.com)
SEC Targets Hidden Mutual Fund Fees
Excerpt: "The Securities and Exchange Commission is cracking down on legal but hidden marketing and brokerage fees that mutual funds routinely charge unsuspecting shareholders. The SEC may ban some of these fees and wants better disclosure of spiraling charges hidden from fund investors. NPR's Elaine Korry reports." (National Public Radio)
An Emboldened Investor Class Is Not Likely to Go Away Soon
Excerpt: "When he confronts shareholders today at the Walt Disney Company's annual meeting, Michael D. Eisner must not only answer for his decisions in recent years as chairman and chief executive of the giant entertainment company. He must also respond to an emboldened investor class, armed and ready to challenge managers more sharply than at any time in recent memory." (New York Times; one-time registration required)
Putnam Dismisses Four Employees After Account Error
Excerpt: "Putnam Investments, the first mutual fund company sued for alleged fraud in the U.S. trading probe, fired four employees, including the head of its 401(k) operations, for improperly handling a retirement plan account." (Bloomberg via TheJournalNews.com)
Opinion: Alan Greenspan-- the Maestro of Chutzpah
Excerpt: "[E]ven though the main cause of deficits is plunging revenue -- the federal government's tax take is now at its lowest level as a share of the economy since 1950 -- he opposes any effort to restore recent revenue losses. Instead, he supports the Bush administration's plan to make its tax cuts permanent, and calls for cuts in Social Security benefits." (Paul Krugman in the New York Times; one-time registration required)
German Coalition Agrees on Pension Level, Berliner Zeitung Says
Excerpt: "The level of pension payouts will not fall below 43 percent of gross wages until 2030, the newspaper said. At the moment pensioners receive about 52 percent if they have contributed for 40 years to the state pension-insurance system, it said." (Bloomberg)
Links to Items on Executive Comp, Benefits in General
Impact of Same Sex Marriages on Qualified Plans and Employee Benefits
Excerpt: "Emerson has written that the Minutemen at the Concord Bridge 'fired the shot heard ‘round the world.' Now, more than 200 years later, another small band of Massachusetts residents, this time a majority of the State Supreme Judicial Court, has fired another shot ..." (Attorney Sherwin P. Simmons, published by Profit Sharing/401(k) Council of America; one-time registration required)
Employer, Take Note: We're Goin' to the Chapel
Excerpt: "A court decision means employers may be required to provide full spousal benefits to g.ay couples." (CFO.com)
Tech Industry Begins Stock Options Lobbying Blitz
Excerpt: "The technology industry is flying in Silicon Valley executives to Washington today to launch a critical round of lobbying to forestall looming rules on stock-option accounting that could subtract billions from corporate profits." ([San Jose] Mercury News)
Overview: IASB Issues Final Standard on Share-Based Payment (PDF)
Excerpt: "The International Accounting Standards Board (IASB) on February 19, 2004 issued its much anticipated International Financial Reporting Standard (IFRS) on accounting for equity-based compensation (EBC), referred to as 'IFRS 2 Share-based Payment'.... The IASB's final standard becomes effective on a 'modified retroactive' basis beginning on January 1, 2005, and with few exceptions, will apply broadly to all types of EBC transactions with employees and nonemployees." (Frederic W. Cook & Co., Inc.)
Newly Posted Events
SunGard Corbel Advanced Pension Conference
in Florida on February 9, 2005
presented by SunGard Corbel
Kaiser Conversations on Health with AARP CEO Bill Novelli
Nationwide on March 3, 2004
presented by Kaiser Family Foundation
Newly Posted Press Releases
PSCA President David Wray Urges Senate Banking Committee To Insure That The SEC Preserves A Level Playing Field For All Investors Under Proposed Hard Close Rule
(Profit Sharing/401(k) Council of America (PSCA))
Evolution Benefits and drugstore.com Offer First Paperless Debit Card Substantiation Process for FSA-Eligible and Non-Eligible OTC Medications
(Evolution Benefits)
Segal's New York Communications Practice Wins Award
(The Segal Company)
IRS Commissioner Mark W. Everson to address National Press Club luncheon March 15
(Internal Revenue Service (IRS))
California Senator Debra Bowen to Speak March 9th on the New California Identity Theft Prevention, Data Security and Confidentiality of Social Security Numbers Laws
(Western Pension & Benefits Conference - Los Angeles Chapter)
Council urges Senate Banking panel to take up alternatives to SEC's 'hard 4:00 p.m. rule' for mutual fund trades
(American Benefits Council)
Rising Number of Companies Considering Alternative Financing for Employee Benefits
(Towers Perrin)
Association and Verizon Reach Agreement on "Golden Parachutes" Proxy
(Association of BellTel Retirees Inc.)
Newly Posted or Renewed Job Openings
Employee Benefits Account Manager
for The Protector Group Insurance Agency, Inc.
in MA
Retirement Benefits Specialist
for Kaleida Health
in NY
Benefits Specialist
for Ralcorp Holdings
in MO
DC/401k Benefits Administrator
for Gabriel, Roeder, Smith & Company
in FL
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