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March 29, 2004 - 13,655 subscribers
Today's sponsor: DATAIR Employee Benefit Systems, Inc.

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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)
Pension Reform Conference Falls Apart over Multiemployer Relief
3/29/04. Excerpt: "A House and Senate pension conference on the Pension Funding Equity Bill of 2003 (HR 3108), which would establish a new interest rate for determining the liability of defined benefit pension plans, fell apart on March 26 after Democrats rejected a House Republican proposal to reduce the number of multiemployer pension plans eligible for federal relief. Part of the legislation would provide direct relief to companies facing severely underfunded pension plans." (CCH News & Information Library)

Multiemployer Plans Face Short- and Long-Term Challenges
33 pages; March 2004. Excerpt: "This report provides the following information on multiemployer pension plans: (1) Trends in funding and worker participation, (2) PBGC's role regarding the plans' financial solvency, and (3) potential challenges to the plans' long-term prospects. GAO is making no recommendations.' Executive summary at http://www.gao.gov/highlights/d04423high.pdf (U.S. General Accounting Office)

Pension Puzzle for Non-Profit Employers: Part I
Excerpt: "Long limited by federal law to 403(b) plans, nonprofits face more complicated choices in the wake of a 1997 federal law that lets them offer 401(k) plans once available only to businesses. While nonprofit officials and retirement experts said they generally saw little difference between 403(b) and 401(k) plans, they also said nonprofit employers should think carefully about retirement benefits, ask for help before making decisions and keep their plans simple." (Philanthropy Journal)

Past Performance Pulling Participant Allocations: Vanguard
Despite those ubiquitous fund disclaimers, past performance – particularly recent past performance – appears to be driving new participant investment decisions, according to new industry data. (PLANSPONSOR; one-time free registration required)

Former Rhode Island Governor to Forfeit Pension
Excerpt: "Former Gov. Edward DiPrete, who served a year in prison after pleading guilty to bribery and other charges, is not entitled to collect his pension, the state Supreme Court ruled Friday." (WoonsocketCall.com)

Rhode Island Ex-Governor's Pension Might Go to His Wife
Excerpt: "In denying the ex-governor's bid to reclaim his pension, the state Supreme Court orders a judge to decide if there are any 'compelling circumstances' that would disqualify Patricia DiPrete as a recipient." (The Providence Journal (one-time registration required))

Employee Ownership Update for March 26, 2004
NCEO Executive Director Corey Rosen discusses a 9th Circuit case where the court's comments give ESOP fiduciaries wide latitude in declining to diversify out of company stock. He also reports on the progress being made by opponents of expensing stock options and other equity instruments. (National Center for Employee Ownership)

Overview: IRS Issues Proposed Regulations Under Anti-Cutback Provisions of Code Section 411(c)(6)
Excerpt: "The proposed regulations provide two methods by which employers may amend their plans to reduce or eliminate burdensome Code Section 411(d)(6) protected benefits when the adverse impact is de minimis." (Employee Benefits Institute of America (EBIA))

Pension Plan Might Leave Firehouse Empty in West Palm Beach
Excerpt: "More than 20 firefighters, including seven of the top brass, could retire in the next seven months because of a new union contract that greatly increases retirement checks and encourages firefighters to retire earlier." (Palm Beach Post)

Oregon Governmental Pension Fund Will Invest Funds in Oregon
Excerpt: "The nest egg of public employees could soon help finance Northwest start-ups with big ideas but little cash. Managers of the Oregon Public Employees Retirement Fund have to find a home for $100 million by 2008, a requirement of House Bill 3613, generated by the 2003 Oregon Legislature." (StatesmanJournal.com)

Houston is One of Just a Few Cities in Texas Seeking to 'Opt Out' of New State Pension Law
Excerpt: "Mayor Bill White says Houston might be handcuffed in solving its pension problem if Prop 15 is allowed to stand. The other opt-out cities say the new law is confusing and will lead to lawsuits. In response, supporters say the law is actually very simple and they mistrust the motives of the cities." (Houston Chronicle)

Retirements Are Draining One California County's Pool
Excerpt: "A wave of impending retirements will force Contra Costa County Administrator John Sweeten to bridge a massive revenue shortfall this spring without some of his top fiscal officers.... [A] new [pension] formula allows non-public safety workers to retire at age 55 and earn an annual pension equal to 2 percent of their final average salary for every year worked." (Contra Costa Times)

Most Financial Advisers Wrong on Retirement Targets
Excerpt: "[F]inancial planning has become a moving target largely because funding for Social Security, Medicare and employee retirement and health benefits are in doubt. Your retirement kitty may need to be bolstered considerably if major government benefits come up short." (John Wasik on Bloomberg.com)

Pension Funds Take on More Risk in Effort to Keep Returns High
Excerpt: "U.S. pension funds are taking on a little more risk in an effort to keep pace with their growing pension obligations. In addition, they are interviewing and hiring new investment managers at an unprecedented rate as they search for innovative strategies ..." (CFO.com)

Survey Results: Does Your Plan Offer a Lifestyle Fund Alternative?
Excerpt: "This week, [PLANSPONSOR.com] asked readers to tell us about their experience with lifestyle/target/asset allocation funds." (PLANSPONSOR.com; one-time registration required)

Experts Debate Investing in Vice
3/29/04. Excerpt: "Many investors can't stand the idea of buying stock in companies that sell tobacco, beer, adult entertainment and gambling equipment. While some experts see these companies as proven profit makers, others say the social costs of investing in such vices outweigh the financial benefits. Hear NPR's Bob Edwards, Adam Kanzer of Domini Social Investments and Caroline Waxler, author of Stocking Up on Sin." (National Public Radio)

Links to Items on Executive Comp, Benefits in General

New EU Prospectus Directive Affects Option Grants to Employees in Europe (PDF)
3 pages. Excerpt: "The Prospectus Directive applies to all companies offering or listing securities in the EU, including non-EU companies, such as US issuers, effective from December 31, 2003." (Pillsbury Winthrop LLP)

Overview: Pentagon Revises Retiree Rehire Policy
Excerpt: "Managers at the Defense Department now can rehire civil service retirees for critical positions without reducing the retirees' salary by the amount of their annuity." (GovExec.com)

Grocery Contract Talks in D.C. Near Deadline
Excerpt: "Giant and Safeway, arguing that they must trim labor costs to compete with the growing ranks of nonunion stores in the region, have targeted three items in this year's negotiations: wages, pension plans and health care payments." (Washington Post; one-time registration required)

How Lucent's Retiree Programs Cost It Zero
Excerpt: "[T]hanks to three benefit and pension funds that Lucent was born with when spun off from AT&T Corp. eight years ago, the big provider of telecom gear never had to dig into its own pocket to pay benefits for U.S. retirees. The funds paid every cent, both of pensions and of retirees' health care." (Wall Street Journal via SFGate.com)

Newly Posted Events

Florida West Coast Employee Benefits Council Annual Educational Workshop
in Florida on April 22, 2004
presented by Florida West Coast Employee Benefits Council

3rd Annual Stars and Stripes Summit - The 2004 National Public Employees Retirement Funds Summit
in Florida on July 18, 2004
presented by Financial Research Associates

The Ins & Outs of Qualified Retirement Plans
in Georgia on May 11, 2004
presented by SOAR - Seminar Opportunities Achieving Results
Newly Posted Press Releases

Recent Cash Balance Conversions Have Actually Increased Company Costs, Watson Wyatt Study Finds
(Watson Wyatt)

Press Briefing on Consumer Benefits of Optional Federal Charter
(American Council of Life Insurers)

America's Health Insurance Plans Hails Announcement of Prescription Drug Card Sponsors
(America’s Health Insurance Plans (AHIP))

Bush Flip-Flop on Patients’ Bill of Rights May Have Been Driven by Campaign Donors
(Common Dreams)

Officials Announce Program for Retiree Employment
(U.S. Air Force)

Retired Educators Across Nation Call On Congress To Repeal Social Security Penalties That Harm Education
(Retired Educators Coalition for Social Security Fairness)

Treasury and IRS Caution Taxpayers About Frivolous Tax Refund Claims on Stock Options
(U.S. Department of Treasury)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Benefit Pension Administrator
for The National Advisory Group, Inc./Pension Consulting Services, Inc.
in PA

Retirement Consultant
for Lincoln Financial Group
in AZ, KS, OR, WA

Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

Fund Administrator
for small Taft-Hartley Funds located in Howard Beach, New York
in NY

Marketing Associate
for The Nolan Financial Group
in DC, MD, VA

Assistant Plan Administrator
for Patriot Bank
in PA

Financial Services Specialist
for Nationwide Insurance
in OH

Vice President, Business Development
for ExpertPlan
in CA

Internal Retirement Product Wholesalers
for Retirement Plan Provider
in NJ

Implementation Coordinator
for Craford Benefit Consultants
in CA

401(k) Enrollers/Independent Contractors – Part Time
for Diversified Investment Advisors
in AZ, CA, DC, FL, IL, KS, MO, NV, TX

Retirement Plans Analyst
for U.S. Foodservice
in MD

Employee Benefits Specialist
for Bank Group in scenic western Colorado resort areas
in CO

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