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March 23, 2004 - 13,655 subscribers
Today's sponsor: SunGard Corbel Inc.

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Significantly Reduce Your Research Time!
Unsure what the Department of Labor is requiring on your 5500s
and where to find the answers? The 5500 Filing Guide is designed
to help you understand annual Form 5500 rules for pension and
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
IBM Takes Issue with Employees' Proposal for Damage Calculation in Cash Balance Case
Excerpt: "International Business Machines Corp. has told a federal court it would be forced to pay exorbitantly rich benefits under a proposal by employees who are suing the company in a landmark pension case. In a filing Tuesday, IBM urged the court not to approve a formula the employees put forward for making back payments to workers covered by a 1999 retirement plan." (AP via MLive.com)

IRS Issues Proposed Anti-Cutback Regulations (PDF)
69 pages. Excerpt: "This document contains proposed regulations providing guidance on the conditions under which a plan amendment may eliminate or reduce an early retirement benefit, a retirement-type subsidy, or an optional form of benefit ... with respect to a participant's benefits attributable to service before the amendment. The proposed regulations would also provide guidance concerning how the notice requirements of section 4980F apply with respect to such plan amendments." (Internal Revenue Service)

Ted Benna Returns to His Roots
Excerpt: "[Ted] Benna, 64, now is going back to his roots, launching a company in Williamsport called Malvern to administer retirement plans for small businesses. With the new venture, he is returning to the work he did in 1981 in Langhorne at the Johnson Cos., his former employer. Johnson, a benefits firm, sponsored the first 401(k) plan ever, using its own workers as guinea pigs." (Philadelphia Inquirer)

Text of IRS Proposed Reg Allowing Exclusion of 501(c)(3) Employees Under Minimum Coverage Test (PDF)
2 pages. Excerpt: "The proposed amendments permit, in certain circumstances, employees of a taxexempt organization described in section 501(c)(3) to be excluded for the purpose of testing whether a section 401(k) plan ... meets the requirements for minimum coverage specified in section 410(b). These regulations will affect tax-exempt employers described in section 501(c)(3), retirement plans sponsored by these employers, and participants in these plans." (Internal Revenue Service)

Overview: IRS Proposes 401(k) Test Exclusion for 403(b) Participants
Excerpt: "The IRS has issued proposed regulations, pursuant to which employees of 501(c)(3) tax-exempt organizations may be excluded from the nondiscrimination test applied to determine whether the 401(k) plan of the organization complies with the minimum coverage requirements." (CCH News & Information Library)

Overview: Proposed Regs Clarify 401(k) Testing for 501(c)(3) Organizations
Excerpt: "After SBJPA, a 501(c)(3) tax-exempt organization can maintain a 401(k) plan, a 403(b) plan, or both. The proposed regulations provide that employees of a 501(c)(3) tax-exempt organization who are eligible to make salary reduction contributions under a 403(b) plan are excludable employees for purposes of testing whether a 401(k) plan or an associated 401(m) plan satisfies the coverage requirements, provided: ..." (SunGard Corbel)

Overview: Exclusion of Exempt Organization Employees in Code Sec. 401(k) and 401(m) Plans
Excerpt: "Newly proposed amendments to the rules implementing Code Sec. 410(b) would permit the exclusion of employees of Code Sec. 501(c)(3) exempt organizations for purposes of testing whether a Code Sec. 401(k) or 401(m) plan satisfies the minimum coverage requirements. The amendments are being made in response to a congressional directive contained in the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16)." (CCH News & Information Library)

Overview: Companies Should Review 401(k) Investment Options in Light of Mutual Fund Investigations (PDF)
5 pages. (Paul Hastings via Financial Executives Institute (www.fei.org))

Full Text: Society of Actuaries Pension Section News, March 2004 (PDF)
20 pages. Articles include 'Retirement Plan Participant Preferences Survey,' 'Group Variable Annuity Pension Plan,' 'Factors Affecting Retirement Mortality,' and 'Summary of 2004 IRS, PBGC, Federal Income Tax, Social Security and Medicare Amounts." (Society of Actuaries)

The Pension Crisis: What the Future Holds for Retirement Plans (PDF)
3/16/04; 89 pages of slides from presentation by David L. Wolfe of Gardner Carton & Douglas LLP and Brian F. Augustian of Deloitte Consulting. (Gardner Carton & Douglas LLP)

Airline's Investor May Dump Stake Over Pension Fight
Excerpt: "Air Canada Inc.'s new equity investor says it might walk away from its planned $650 million Canadian ($487.3 million) investment in the financially ailing airline due to union resistance to proposed pension changes." (Business Insurance)

A Sure 'E-Ticket': Pension Funds Seek Meeting With Disney
Excerpt: "Six of the country's largest and most influential public pension funds on Monday requested a meeting with directors of The Walt Disney Co. to discuss performance and governance concerns." (AP via Washington Post; one-time registration required)

Opinion: Felony Conviction-- Ineligible to Manage Mutual Funds
Excerpt: "The reality, which is becoming increasingly clear to the public, is that mutual funds are created by and operated primarily to benefit their investment advisors. Managers use fund assets, i.e. brokerage commissions, to pay for or 'soft dollar' investment research they would otherwise have to purchase themselves.... [M]anagers treat mutual funds like retail sucker pools they can gingerly dip into to further their own financial objectives." (The Benchmark Companies)

Another 'Socially Responsible' Fund Eliminates Use of 'Soft Dollars'
Excerpt: "MMA Praxis Mutual Funds announced its voluntary elimination of the use of 'soft dollars,' a legal but controversial and complex arrangement whereby investment firms buy research and information tools without cash. Many investment firms pay brokerage commissions that bundle these 'soft dollar' research fees with trading costs. These financial hits are not reflected in expense ratios, though they can drag on performance ..." (SocialFunds.com)

Opinion: Social Security Isn't Doomed, But Too Many People Now Think It Is
Excerpt: "A Republican sweep in November might put Social Security back on the table. But the parties are too far apart to make any significant changes.... Luckily, Social Security is strong enough to soldier on." (Jane Bryant Quinn in Newsweek via MSNBC.com)

Links to Items on Executive Comp, Benefits in General

Plan Must Pay Civil Penalties and Attorneys' Fees for Taking 2 Years to Provide Requested Documents
Excerpt: "This case is a must-read for any plan whose records are 'in disarray'.... Even though the plan had a form on file with the participant's election of the single-life annuity and the spouse's signature waiving the qualified joint & survivor annuity, the spouse's signature was neither witnessed nor notarized." (Employee Benefits Institute of America (EBIA))

Additional Coverage on Mike Gordon: Chief ERISA Architect Dies
3/16/04 issue. Excerpt: "Mr. Gordon became the 'quarterback' who worked tirelessly to muster the political and public support needed to pass ERISA, a bill that had powerful constituencies opposed to many of its key provisions, says Frank Cummings, former chief of staff to former Sen. Jacob K. Javitz, R-N.Y." (Human Resource Executive)

Newly Posted Events

NCPERS 2004 Annual Conference and Exhibition
in California on May 2, 2004
presented by National Conference on Public Employee Retirement Systems

Health Care Quality Initiatives in Northeast Ohio
in Ohio on April 15, 2004
presented by Worldwide Employee Benefits Network (WEB) - Cleveland Chapter

Automatic Rollovers: The New DOL Guidance
Nationwide on April 8, 2004
presented by ABA Joint Committee on Employee Benefits
Newly Posted Press Releases

Older Workers Would Delay Retirement if Employers Offered Phasing, Watson Wyatt Survey Finds
(Watson Wyatt)

Evolution Benefits And Milliman USA Enter Into Exclusive Marketing Agreement To Offer FSA Assist(TM) Product
(Evolution Benefits)

The412iCompany to host National Teleconference on New 412i Regulations
(The 412(i) Company)

ACLI & CSC To Examine Cost of Insurance Regulation
(American Council of Life Insurers)

PensionOnline Announces Important Enhancements to its One Man (k) Analysis™ Product
(Metrics Partners)

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