If the headlines in this newsletter aren't clickable for you,
please use the online, clickable version at:
https://benefitslink.com/2004/2004_04_19_retirement.html
(click or copy-and-paste the above address into your web browser)

BenefitsLink
Retirement Plans
Newsletter		To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

April 19, 2004 - 13571 subscribers
Today's sponsor: Employee Benefits Institute of America Inc. 


The Country's Best 401(k) Plans Manual!
Questions about 401(k) plan administration or legal requirements?
Need some sample forms? Look no further--EBIA is here to help!
Our two-volume 401(k) Plans manual is a thorough, easy-to-use,
and cost-effective solution. Written and edited by top employee
benefits attorneys, our 401(k) Plans manual has over 1,700 pages
packed with the information you need to answer your 401(k) plan
questions.
Learn More

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Summary of Pension Funding Equity Act, Prepared by Congressional Research Service (PDF)
4 pages. (Congressional Research Service of the Library of Congress)

Opinion: a Stitch Barely In Time
Excerpt: "Unless you have been out of the planet for the past year and a half, you know that when the Treasury dropped the issuance of 30-year bonds, which has been the benchmark for calculating pension plan liabilities, it created quite a stir among actuaries and others whose business it is to provide plan sponsors with the minimum and recommended amounts to keep their plans properly funded ..." (Alvin D. Lurie in Pension & Benefit Power)

Opinion: Final Pension Agreement Places Corporate Interests Above Taxpayer Interests
Excerpt: "President Bush should have stood by his original objections to the bill's corporate welfare provisions and vetoed it. While the final version is better than the earlier Senate proposal, it still sends a dangerous message that inconvenient pension-funding requirements can be twisted--and even avoided--through special-interest provisions." (David C. John published by the Heritage Foundation)

Opinion: Will Your Pension Check Bounce?
Excerpt: "What is needed is an overhaul of the rules that would save the sickest plans and write new rules to prevent another pension disaster.... This month, Congress looked at these choices and caved in to one side. Both the Senate and House passed similar bills that amount to an $80 billion gift for business ..." (San Francisco Chronicle)

Can Cash Balance Plans Survive?
Excerpt: "For the government, the most serious immediate effect of a reduction in the number of defined benefit plan participants is the loss of premium revenue for the PBGC, an agency already in peril. Worse, plans that can terminate are those that are fully funded and present very little benefit loss risk to the PBGC." (Dallas L. Salisbury on BenefitNews.com)

Sixth Circuit to Review Lump Sum Calculation Case
Excerpt: "A case now pending before the Sixth Circuit Court of Appeals raises the question of whether certain defined benefit plans can use pre-retirement mortality assumptions to calculate pre-retirement lump sum distribution amounts. The case ... is on appeal from a federal district court that ruled, where accrued benefits are payable as a death benefit, pre-retirement mortality assumptions should not be applied to calculate lump sum payment amounts." (The Human Capital practice of Deloitte Consulting LLP)

Solving the Pension Puzzle for Non-Profit Employers: Part 5
Excerpt: "Questions nonprofits should consider in deciding which type of retirement plan to select include: ..." (Philanthropy Journal)

QDRO Errors: Plans Sue to Recover Overpayments
N. Am. Coal Corp. Ret. Sav. Plan v. Roth (D.N.D. 2004); Jones v. Am. Airlines, Inc. (Tex. App. Ct. 2/26/04). Excerpt: "In each of these cases, the plan erroneously overpaid one of the parties to a preexisting QDRO.... Here, both plans succeeded in obtaining a court ruling to recover an erroneous payment, but litigation can involve risk and considerable expense and, as the second case demonstrates, a favorable court ruling does not necessarily end the struggle to recover the funds." (Employee Benefits Institute of America Inc. (EBIA))

Agreement in Divorce Decree to Name Children as Plan Beneficiaries Is Unenforceable If Not a QDRO
MacKay v. Estate of Harris (D. Me. 2004). Excerpt: "Here is yet another beneficiary designation dispute--this time between the new spouse and the children of the former spouse. After the participant died, his daughters sued after to enforce a divorce settlement in which the participant had agreed to leave his share of his qualified plan benefits to his surviving daughters." (Employee Benefits Institute of America Inc. (EBIA))

Overview: Proposed DOL Regs and PT Class Exemption for Automatic IRA Rollovers of Cashouts (PDF)
4 pages. Excerpt: "[The fiduciary] safe harbor ... is intended to give retirement plan fiduciaries a set of guidelines that will ensure compliance with their fiduciary obligations under ERISA. If a rollover IRA does not satisfy the requirements of the safe harbor, a fiduciary can still theoretically argue that its selection of an IRA provider and the initial investment of IRA assets were consistent with its fiduciary obligations." (Kirkpatrick & Lockhart LLP)

The Retirement Savings Tax Credit: a Fact Sheet (PDF)
2 pages. Excerpt: "Section 618 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) authorized a non-refundable tax credit of up to $1,000 for eligible individuals who contribute to an IRA or an employer-sponsored retirement plan. The credit was first available in 2002. It will expire after 2006 unless extended by Congress." (Congressional Research Service of the Library of Congress)

Florida State Employees Leery of New Defined Contribution Retirement Plan Option
Excerpt: "The idea of betting their pensions on the vicissitudes of the market still seems troubling for members of the Florida Retirement System. It's been almost two years since the Division of Retirement started offering tutorials on how to make choices and giving employees the chance to switch from the stodgy safety of the traditional 'defined-benefits' plan to the risk and rewards of a 'defined-contributions' system." (Tallahassee.com)

Links to Items on Executive Comp, Benefits in General

Results of Segal's Survey of Top HR and Benefits Issues for Institutions of Higher Education (PDF)
2 pages. Excerpt: "Higher education institutions may want to explore negotiating with PBMs for better discounts. The survey found that less than one-third of respondents (27 percent) are pursuing or have pursued that cost management strategy, and half of respondents are either not currently considering it (31 percent) or don't know (19 percent)." (The Segal Company)

Insurer's Delay in Deciding Appeal Did Not Permit Claimant to File Suit Before Decision Was Issued
Nichols v. Prudential Ins. Co. of America (S.D.N.Y. 2004). Excerpt: "[T]he court said that when a claims administrator 'begins in good faith to investigate and consider [an appeal] within a period manifesting substantial compliance with the regulatory limits and notifies the claimant that it is doing so, that process should be allowed to run its course for a reasonable time, as long as the administrator continues to exhibit good faith.'" (Employee Benefits Institute of America Inc. (EBIA))

Overview: Same-Sex Marriages and Employee Benefit Plans (PDF)
2 pages. Excerpt: "[T]he apparent validity of same-sex marriages in Massachusetts, the absence of clear answers on the issue in other jurisdictions, and the possibility that higher authorities in the jurisdictions debating the issue could conclude that the marriages are not and never were valid, are forcing employers and employee benefit plan fiduciaries to sort through difficult issues regarding the entitlements of same-sex spouses under their employee benefit plans." (Kirkpatrick & Lockhart LLP)

Failure to Deliver SPD Is Not Breach of Fiduciary Duty Where Need to Enroll Was Communicated
Brenner v. Johns Hopkins Univ. (4th Cir. 2004). Excerpt: "[T]he court rejected the assertion that failure to distribute the SPDs by adequate means would, by itself, constitute a breach of fiduciary duty when several other documents sent by the employer would have adequately informed the employee of the enrollment requirement." (Employee Benefits Institute of America Inc. (EBIA))

GAO Chief Sounds Alarm Bells On Baby Boomer Liabilities
Excerpt: "General Accounting Office chief David M. Walker, who has raised the profile of his agency by warning about the dire consequences of spiraling government debt, said yesterday that the public and Congress remain oblivious to the serious financial crunch that is looming with the retirement of the baby boomers." (Washington Times)

Overview: FASB Issues Exposure Draft on Accounting for Employee Stock Option Grants
Excerpt: "The Financial Accounting Standards Board on March 31 issued an Exposure Draft that would amend FASB Statement No. 123, Accounting for Stock-Based Compensation, to generally require companies to expense the fair value of stock options issued to employees for fiscal years beginning after December 15, 2004." (The Human Capital practice of Deloitte Consulting LLP)

Opinion: FASB Fumbles Stock Options
Excerpt: "In essence, FASB proposes treating a possible future expense if it were as an actual expense.... The FASB proposal to require companies to treat the estimated fair value of stock options as an actual and current expense rests on a dubious conjecture about what the real cost of stock options to stockholders and when it occurs." (Alan Reynolds in the Washington Times)

Newly Posted Events

22nd Annual ALI-ABA Course of Study - Advanced Law of Pensions, Welfare Plans, and Deferred Compensation
in Massachusetts on July 5, 2004
presented by ALI-ABA (American Law Institute-American Bar Association)

28th Annual ALI-ABA Course of Study - Basic Law of Pensions, Welfare Plans, and Deferred Compensation
in Illinois on July 12, 2004
presented by ALI-ABA (American Law Institute-American Bar Association)

Joint Forum on Health, Productivity and Absence Management
in Florida on November 9, 2004
presented by Integrated Benefits Institute - National Business Group on Health
Newly Posted Press Releases

Health Savings Accounts: Latest News, Opinion and Products & Services
(benefits information group)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Manager Of Benefits
for Diversified Entertainment Company In New York City
in NY

DC/401(k) Plan Analyst
for NPS Retirement Plan Consulting
in VT

Marketing Representative
for Federated Investors
in CA, CO, IL, PA

Pension/401K Qualified Plan Wholesaler-So. California
for Nationwide
in CA

Client Relations Manager
for ING U.S. Financial Services
in DC, MD, VA

Daily Valuation Supervisor
for Allen, Gibbs & Houlik, LC, Wichita, KS
in KS

Senior Plan Administrator/Consultant
for WESPAC
in CA

Defined Contribution Business Analyst
for SunGard Employee Benefit Systems
in AL

Handy Links:
Copyright 2004 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Published by:

BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

Editor and Publisher: David Rhett Baker, J.D.

Housekeeping: