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Retirement Plans
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April 15, 2004 - 13565 subscribers
Today's sponsor: Employee Benefits Institute of America 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)
For Form 5500, Are Participants with Plan Balances the Only Ones Counted?
Excerpt: "No. The participant count used purposes of for coverage testing is the count to be used for the Form 5500. Therefore, the number of participants who have an actual balance in plan may not be the correct number to use. For example, in a 401(k) plan employees who are eligible to defer but do not defer are to be counted as participants for purposes of the coverage test and the Form 5500 count of participants." (McKay Hochman Co., Inc.)

Judge Says He Likely Will Certify Class-Action 401(k) Suit Against Former Kmart Executives
Excerpt: "A federal judge says he likely will certify a class-action lawsuit filed against former Kmart executives by employees who say they lost millions in retirement benefits after the company declared bankrup.tcy in 2002." (AP via the [Columbia, S.C.] State)

Slide Show: 404(c) Issues-- Mapping, Blackouts, Disclosure, Annuities vs. Registered Issues
Powerpoint Presentation from the 2004 ASPA 401(k) Sales Summit, February 23, 2004, Orlando, Florida. (Reish Luftman Reicher & Cohen)

401(k) Matching Contributions in Company Stock: Costs and Benefits for Firms and Workers
Working paper. Excerpt: "This paper examines why some employers provide matching contributions to 401(k) plans in company stock and explores the implications of match policy for employee retirement wealth.... [F]irms consider the retirement security of their workers in making the match decision, either because firms want to minimize the risk of violating their fiduciary responsibility or because employees more fully value company stock at companies with lower firm-specific risk." (National Bureau of Economic Research)

Overview: Excluding 403(b)-Covered Employees from 401(k) and 401(m) Plans (PDF)
2 pages. Excerpt: "[A] controlled group that consists of both a tax-exempt employer and a for-profit company will generally not need to include members of the tax-exempt employer in testing the 401(k) (m) plan for the taxable company if the members of the tax-exempt organization are eligible for a 403(b) plan. The proposed rules, retroactively effective for plan years beginning in 1997, may be relied upon immediately." (Milliman USA)

Unresolved Issues May Limit Impact of IRS Proposed Rules Allowing 403(b) Participants To Be Excluded
Excerpt: "[A]ccording to Dan Schwallie, an attorney with Hewitt Associates, the proposed regulations, which would retroactively apply to post-1996 plan years and may be relied upon prior to the issuance of final rules, may prove problematic in application for employers that maintain multiple 401(k) plans and employers that have established 401(m) plans to accept 403(b) matching contributions as a means of avoiding limits under the previously applicable exclusion allowance." (CCH News & Information Library)

Annuities in a 403(b) or 457(b)?
Excerpt: "When the 403(b) was first created in 1958, annuities were the only investment option allowed. In 1974 Congress added paragraph 7 to the plan, creating the 403(b)(7) custodial account and opening the way for investment in mutual funds. However, more than 30 years later, close to 80% of all 403(b) money still sits in annuity investments." (The Motley Fool; one-time registration required)

Houston United Way's Pension Woes May Pinch Affiliated Agencies
Excerpt: "To spread the burden, the United Way wants to recalculate the amount each agency pays into the plan based on the liability it has built up.... In addition, new employees would not be allowed to participate in the pension plan, according to the United Way's proposal." (Houston Chronicle)

At Long Last-- a 30-Year Treasury Rate Replacement (PDF)
3 pages. Excerpt: "The bill calls for interim replacement, for certain purposes, of the defunct 30-year Treasury bond rate with a composite rate based on conservatively invested long-term corporate bonds. The replacement rate will be effective for plan years beginning in 2004 and 2005 only.... The bill does not affect the interest rate used for certain other purposes, such as for calculating minimum lump sum distributions." (Mellon's Human Resources & Investor Solutions)

Overview: DOL Safe Harbor for Automatic Rollovers
Excerpt: "Another condition that must be satisfied in order to meet the safe harbor proposed in the regulations is that participants must receive a summary plan description ('SPD') or summary of material modifications ('SMM') describing the plan's automatic rollover provisions ..." (Southern Employee Benefits Conference)

University of Washington Retirees Cashing In
Excerpt: "Tomorrow, [Steven] Olswang will leave his Seattle-campus office and earn $173,880 a year as acting chancellor at UW-Tacoma. He will also continue to collect pension. However, Olswang is only one of several high-paid UW administrators who receive retirement pension while also working full time ..." (The Daily of the University of Washington-Seattle)

Pension Legislation Requires Funding Notices for Multiemployer Plans (PDF)
1 page. Excerpt: "The Pension Funding Equity Act of 2004 requires an annual Multiemployer Plan Funding Notice that advises whether or not the plan is fully funded. The notice must state: The percentage of underfunding, if any, of current liabilities; The value of fund assets; Annual benefit payments; [and] The ratio of assets to annual benefit payments." (Kraw & Kraw)

Links to Items on Executive Comp, Benefits in General

National Compensation Survey: Employee Benefits in Private Industry, March 2003 (PDF)
16 pages. Excerpt: "About 6 out of 10 workers in private industry had access to medical care and retirement benefits in the United States in 2003. This summary presents benefits data from the National Compensation Survey (NCS) for: Worker characteristics; Establishment characteristics [and] Geographic areas." (U.S. Department of Labor, Bureau of Labor Statistics)

GAO Report: Certain Postretirement Benefits for Energy Dept. Contractor Employees Are Underfunded
43 pages. Excerpt: "Given DOE's long history of using contractors and the rising cost of postretirement benefits, you asked GAO to (1) analyze DOE's estimated financial obligation for postretirement health and pension benefits for contractor employees at the end of fiscal year 2003, (2) determine how DOE evaluates its contractor postretirement health and pension benefit programs and assesses the comparative levels of benefits offered by contractors ..." (U.S. General Accounting Office)

Why Are So Many Older Women Poor? (PDF)
8 pages; by Alicia Munnell. Excerpt: "The economic status of older Americans has improved dramatically since 1960. Today, the poverty rate for those 65 and over is about the same as for those aged 18-64. But substantial pockets of poverty remain, especially among older non-married women. This brief will focus on why older women are particularly vulnerable." (Center for Retirement Research at Boston College)

Same-Sex Marriage in Massachusetts: Employee Benefits and Employment Law Implications (PDF)
7 pages. Excerpt: "As a result of the Massachusetts Supreme Judicial Court's decision in Goodridge v. Department of Public Health, same-sex marriages are authorized to occur in the Commonwealth as early as May 17, 2004. While the court made clear that same-sex marriages must be treated in the same manner as opposite-sex marriages for purposes of Massachusetts law, the Goodridge decision did not provide any direct guidance regarding ... the areas of employment and employee benefits." (Goodwin Procter)

G.ay Marriage Debate Moves Into Workplace
Excerpt: "Activists want the same benefits long considered the domain of traditional married couples, including health insurance, family leave, access to a partner's pension, company scholarships for children and adoption benefits." (USA Today)

Understanding Nonparticipation in Employee Stock Purchase Plans
Working paper. Excerpt: "The picture that emerges from the analysis of these data suggests that there is substantial non-participation in these plans even though all employees could increase gross compensation through participation. We discuss a number of potential explanations for non-participation." (National Bureau of Economic Research)

Newly Posted Events

412i National Teleconference
Nationwide on April 23, 2004
presented by The 412(i) Company

How to Comply With the New FLSA Regulations Audio Conference
Nationwide on May 4, 2004
presented by Thompson Interactive, A Division of Thompson Publishing Group

Rising Health Care Costs ... Strategies for Containment
in California on April 28, 2004
presented by No. Calif. Chapter of Certified Employee Benefits Specialists (ISCEBS)
Newly Posted Press Releases

SEC Adopts Fund Disclosure Rules and Foreign Bank Loan Exemption; Proposes Shell Company Rules
(U.S. Securities and Exchange Commission)

Verizon Retirees Wage Shareholder Battle Against Corporate Excesses
(Association of BellTel Retirees Inc.)
Newly Posted or Renewed Job Openings
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Qualified Plan Administrator
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Counsel
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in MN

Director of Compliance
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Product Manager
for New York Life Investment Management LLC
in MA

Pension New Business Analyst
for Minnesota Life
in MN

Account Manager Group Insurance Benefits
for Fickewirth & Assoc. Inc.
in CA

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