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March 24, 2004 - 13,655 subscribers
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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)
Senate Panel Seeks Mutual Fund Changes
Excerpt: "The chairman of the Senate Banking Committee, weighing legislation to overhaul the mutual fund industry, expressed interest Tuesday in new requirements to give investors more data on fees and fund operations." (AP via Washington Post; one-time registration required)

Putnam Faces Big Penalties for Alleged Improper Fund Trades
Excerpt: "The Securities and Exchange Commission is seeking a payment from Putnam Investments of several hundred million dollars for [alleged] improper trading in its mutual funds, according to a legal filing Putnam made in response to the commission's proposal." (New York Times; one-time registration required)

Global Crossing Settles for $325 Million
Excerpt: "Investors and former workers who lost money and their pensions in the 2002 collapse of Global Crossing, the telecommunications company, will receive $325 million in a settlement of a class-action lawsuit ... Ralph Ferrara, a lawyer at Debevoise & Plimpton in Washington, who represented Global Crossing's directors and officers, said he thought the recovery for the employees of Global Crossing was the largest ever under [ERISA]." (New York Times; one-time registration required)

Full Text: Report on IRS and DOL Developments, March 2004 Edition (PDF)
5 pages. Articles include 'The Two P's: Plan Document and Prudent Process,' 'Excessive Fees: The Next Class Action Litigation Focus?', 'IRS OKs Charging Plan Expenses to Terminated Participants,' 'Reimbursing the Employer for Plan Expenses,' 'Safe Harbor 401(k) Plans: When Are They Exempt from Top-Heavy?', 'What is the Effect of a Significant Change in Coverage During the Transition Period?' and 'What Due Diligence?" (Reish Luftman Reicher & Cohen)

The Importance of IRD (Income in Respect of a Decedent)
Excerpt: "One of the critical tax compliance issues CPAs help their clients with is the proper reporting of IRD--income a decedent is entitled to at the time of his or her death but which is not properly includible on any federal income tax return. It also includes income triggered by reason of death, including IRA distributions." (Journal of Accountancy)

Retirees Now Can Work in Defense Jobs at Full Pay and Keep Pension
Excerpt: "The Pentagon has announced a new policy that will allow civil service retirees to return to work at the Defense Department and be paid a full salary while collecting their federal pension. The policy change was approved by Congress last year ..." (Washington Post; one-time registration required)

USPS, Treasury Debate Military Pension Responsibility
Excerpt: "The heads of the Treasury Department and U.S. Postal Service differed on which agency should be responsible for two aspects of last year's Civil Service Retirement System legislation ... The legislation reduced the amount of money the USPS pays into the Civil Service Retirement System, but it also required the postal service to place savings in an escrow account starting in 2006 and to take over funding of CSRS benefits earned by postal employees during military service ..." (DM News)

What Prevents a Bank from Making a Loan Using an IRA as Collateral?
Excerpt: "IRC Section 408(e)(4) essentially states that any IRA assets pledged as security for a loan are treated as distributed to the IRA owner. Though the rule does not deny collateralization, it would make the pledged amount of any traditional IRA assets subject to income taxes ..." (Compliance Headquarters)

More Retirees in the Red, Not the Pink
Excerpt: "For many Americans, retirement isn't as rosy as they might have expected. The best-laid plans must be postponed or scaled back when budgets turn from black ink to red." (Christian Science Monitor)

Links to Items on Executive Comp, Benefits in General

Paul Shultz Asked to Stay Another Year at Treasury (PDF)
The Treasury Department is asking Paul Shultz to stay on another year as Director of Rulings and Agreements in the Employee Plans office under the Tax Exempt & Government Entities operating division of the IRS. The announcement was made by Carol Gold at the 3/23/04 Enrolled Actuaries meeting. (Internal Revenue Service)

Report Says Medicare to Go Broke by 2019
Excerpt: "Medicare will have to begin dipping into its trust fund this year to keep up with expenditures and will go broke by 2019 without changes in a program that is swelling because of rising health costs, trustees reported Tuesday." (AP via Washington Post; one-time registration required)

Overview: OASDI Trust Funds-- 2004 Trustees' Projections
Excerpt: "The Trustees of the Old-Age and Survivors Insurance and Disability Insurance (OASDI) programs project in their 2004 report that the combined trust funds are sufficient to pay full benefits for the next 38 years, until 2042.... While the combined trust funds are sufficient to pay full benefits for the next 38 years, the Trustees also report that both OASI and DI programs continue to face long-term deficits." (AARP Research)

Text of Treasury Secretary Snow's Testimony on Latest Social Security Trustees' Report
Excerpt: "This year's report is little changed from last year's report. It shows that the Social Security program is seriously under funded and financially unsustainable in the long run.... The fundamental math of Social Security is inescapable as the large baby boom generation reaches retirement age and the number of workers paying into the system declines significantly ..." (U.S. Treasury Department)

Opinion: Awash in Duplicity?
Excerpt: "In previous columns, I have warned that George W. Bush is in danger of appearing Nixonian -- using Richard Nixon's political methods ... The clearest evidence yet of George W. Bush as Richard Nixon has arisen over the questions of what the White House knew about the cost of the recently passed Medicare drug bill, when did it know it and whether information was actively suppressed that might have defeated the measure in Congress." (Bruce Bartlett in the Washington Times)

Opinion: Awash in Debt
Excerpt: "Despite pages and pages of complex tables and charts, the moral of this story is simple: Social Security and Medicare are promising far more benefits than they can afford." (Matt Moore in the Washington Times)

The Federal Government's Financial Condition and Fiscal Outlook
Excerpt: "America needs to understand the nature and magnitude of a daunting challenge." (David M. Walker, Comptroller General of the United States, in the Journal of Accountancy)

Social Security's 'Death Master File' Can Be Viewed Online
Excerpt: "The Social Security Administration's (SSA) official Death Master File is now available for online searches to support a variety of benefit and HR management functions." (BenefitNews.com)

Does It Pay to Search for G.ay Workers?
Excerpt: "Since by the most generous estimates only 10 percent of the population is g.ay, it's likely that g.ays amount to a similarly small fraction of the nation's workforce. However, that fraction may contain a disproportionately high number of desirable job candidates, since research suggests that g.ays tend to be better educated and more successful professionally than the population as a whole." (Workforce.com)

Same-Sex Marriage in Massachusetts: New Complications for Employers
Excerpt: "The ruling in favor of same-sex marriage by the Massachusetts Supreme Judicial Court (SJC) may have unintended consequences for employers across the country -- including, ironically, curtailment of domestic partner benefits." (Thompson Publishing Group)

G.ay Unions Could Affect Benefits; Health Insurance, Leave Policies Scrutinized
Excerpt: "The g.ay marriage debate could mean first-of-a-kind changes to employee benefit plans. In some states, change is already afoot, with some companies being required by law to offer health benefits to employees' same-sex spouses." (USA Today)

DaimlerChrysler Halts 'Phantom Share' Pay Plan
Excerpt: "DaimlerChrysler has frozen plans to pay supervisory board members part of their salaries in 'phantom shares' because of legal uncertainty over stock-based rewards, the group said on Tuesday." (Reuters via Washington Post; one-time registration required)

Newly Posted Events

Disease and Pharmacy Management
in Massachusetts on April 16, 2004
presented by New England Employee Benefits Council

International Benefits
in Massachusetts on May 21, 2004
presented by New England Employee Benefits Council

Form 5500 Preparation From the IRS and Auditor's Perspectives
in Massachusetts on April 21, 2004
presented by Worldwide Employee Benefits Network (WEB)

412iNational Teleconferece this Friday!
Nationwide on March 26, 2004
presented by The 412(i) Company

Substance Abuse: To Test or Not to Test? 90-Minute Interactive Audio Conference
Nationwide on April 15, 2004
presented by Thompson Interactive

Law Review Symposium on Employee Benefits Law
in Illinois on April 2, 2004
presented by The John Marshall Law School
Newly Posted Press Releases

Treasury And IRS Propose Guidance On Pension Plan Amendments That Simplify Distribution Alternatives
(U.S. Treasury Department and Internal Revenue Service)

Metrics Partners and The McHenry Group Team Up
(Metrics Partners)

Statement of U.S. Secretary of Labor Elaine L. Chao at Meeting of the Social Security and Medicare Board of Trustees
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)

Sean Gultig (TRUSTlynx)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Benefits Administrator
for PennMont Benefit Services, Inc.
in PA

Dir, Benefits
for Watson Pharmaceuticals Inc
in CA

Defined Contribution Plan Administrator
for Berlin, Ramos & Company, P.A. CPAs,
in MD

Defined Benefit Implementation Specialists
for Constantin Control Associates
in NC, NJ

Retirement Plan Administrator
for Small TPA Firm Established in 1982
in NH

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