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May 5 and 6, 2004 - 13,450 subscribers
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PBGC Proposes New Penalties
Excerpt: "The government's pension insurance agency plans to revamp and in some ways toughen the penalties it can assess against employers that fail to tell workers when their pension plans are significantly underfunded." (Washington Post; one-time registration required)
'Roth 401(k)' Is Next Big Thing?
Excerpt: "The Roth 401(k), though not available until Jan. 1, 2006, is expected to have the bigger impact of the two. That plan will allow participants to make after-tax contributions to their 401(k) plan up to the 2006 limit of $15,000. Like in a Roth IRA, the growth will be tax free upon withdrawal. 'It's going to be the big new thing,' said [Brian Graff, ASPA Executive Director], who predicts that the Roth 401(k) will lead to increased 401(k) contributions overall." (Investment News)
Opinion: 5 Critical Fixes for 401(k) Plans
Excerpt: "These voluntary workplace retirement plans offer novice investors plenty of opportunities to mess up, and millions are availing themselves of those opportunities. Among the issues Munnell and fellow Boston College economist Annika Sunden identify in their new book 'Coming Up Short: The Challenge of 401(k) Plans' ..." (Liz Pulliam Weston on MSN Money)
How to Take Early Distributions from 403(b) and 457(b) Programs
Excerpt: "The common watch word to plan participants is that one should not or can not take distributions from their 403(b) plan or 457(b) plan (or other qualified plan) before age 59-1/2. This is not true." (403bWise.com)
Some Cities Struggling to Keep Pension Promises
Excerpt: "The people of Houston may not know it, but they have plenty of company. Similar pension sweeteners have backfired in Philadelphia, San Diego and Milwaukee.... Still these benefits plans are being promoted to other city officials across the country. At the heart of the matter is a type of pension benefit that has generally been shunned by corporations but embraced by state and local governments. Known as a DROP, for deferred retirement option program ..." (New York Times; one-time registration required)
Houston Pension Plan Crisis: Who Knew What, and When?
Excerpt: "Legally, Houston taxpayers are responsible for paying the price for the Houston Municipal Employees Pension system. Voters will decide later this month whether to let the city cut retirement benefits to reduce the billion-dollar shortfall. But could this crisis have been avoided?" (News24Houston.com)
Overview: FASB to Propose Radical Change In Accounting for Cash Balance Plans (PDF)
Excerpt: "For the majority of cash balance plans – those that credit 'interest' based on a varying index such as the yield rate on one-year Treasury bills – the change could materially increase a plan sponsor's reported obligations and costs." (Mellon's Human Resources & Investor Solutions)
Chile Plans Reform of Model Privatized Pension System
Excerpt: "Chile's private pension fund system, seen as a model throughout Latin America, is set for a government overhaul amid worries it will face major payouts next year to a flood of newly-retired workers." (Reuters via Forbes.com)
Pension Funding Levels Improving
Excerpt: "But lower interest rates have increased gross liabilities and offset much of the improvement." (CFO.com)
Skandia Wins Final Ruling in Pan-European Pensions Case
Excerpt: "The Swedish Supreme Administrative Court has now announced its ruling on the so-called Pan-European Pensions case, which concerns the right of employers to deduct premiums for occupational pension plans taken out with insurance companies in other EU countries according to the same rules that apply for deduction of premiums paid to domestic insurance companies." (Primezone)
Employee Ownership Update for May 5, 2004
NCEO Executive Director Corey Rosen discusses a new study finding that, if anything, there is a negative relationship between increased executive compensation (largely in stock options) and shareholder return. Rosen also discusses Google's unusual IPO and the IRS's continuing crackdown on S corporation ESOP tax shelters. (National Center for Employee Ownership)
San Diego Pension Fund Trustee Wants Look at Consultant's Role
Excerpt: "A Securities and Exchange Commission review of pension fund advisers has prompted a new twist in the controversy over the role of a prominent consultant to the San Diego city retirement fund.... Many consulting firms have been tapped for the SEC probe, which is industrywide. The agency is studying a broad array of issues, including the use of so-called 'soft dollars,' Wall Street lingo for above-market brokerage commissions used to pay for services including research and marketing." (AP via Miami Herald; one-time registration required)
Governmental Pension Fund Trustees Might Skip Google IPO
Excerpt: "Pension funds from New York to California may boycott the Google stock offering when shares go on sale this summer, citing the founders' lopsided control of super-voting shares." (New York Post)
Another Question is Answered in the Who's the Employer Q&A Column
My company currently has no retirement plan. Is it possible to have my performance-based bonus reported on a Form 1099 even though my normal salary is reported on Form W-2? (BenefitsLink.com)
Understanding Exchange-Traded Funds
Excerpt: "Put off by the recent mutual-fund scandal, many investors are starting to investigate exchange-traded funds. Here's the lowdown." (BusinessWeek Online)
Overview: EBSA Grants Class Exemption for Transactions Involving Interests In REITs
Excerpt: "The exemption is designed to provide relief for plans sponsored by a trust REIT that wish to invest in REIT-issued securities." (CCH News & Information Library)
Is Dynamic Asset Allocation Always a Good Move? (PDF)
5 pages. Excerpt: "Though some pension consultants believe that a dynamic asset allocation is superior to a static asset allocation, it doesn't always produce superior results. The decision to use a dynamic asset allocation will depend on the goals and risks specific to the pension plan and the plan sponsor." (Contingencies Magazine)
Opinion: Social Security 'Trust Fund' Fiction Is a Weed Waiting to Sprout
Excerpt: "The way to fix this problem, of course, is to create a real Social Security trust fund, which would require legislation. I'd have the fund buy mortgage-backed securities and student-loan-backed securities and corporate bonds and such. No Treasury IOUs and, for lots of reasons, no stocks.... This would produce a true trust fund that would cover baby boomers' retirement costs and cushion the transition to a new system, which we need given the falling ratio of workers to beneficiaries." (Allan Sloan in the Washington Post; one-time registration required)
A Tough Sell: Japanese Social Security
Excerpt: "With almost 40 percent of young workers skipping out on their social security payments, Japan started an advertising campaign featuring a popular actress, who sternly lectured subway riders: 'So you don't mind crying in the future? Pay now. Or later, you don't get paid.'" (New York Times; one-time registration required)
1983 Social Security Bailout Left Out Longer Life Expectancies
Excerpt: "How could a program that was fixed for at least 75 years show up broken after 20 years? The answer is simple. And the folks in Washington should have known. In fact, they did know. Social Security is going broke for a truly wonderful reason. We have been wildly successful at extending human life." (Scott Burns in the Houston Chronicle)
Links to Items on Executive Comp, Benefits in General
Opinion: Olde Europe Not Getting Any Younger
Excerpt: "Before long, declining demographic trends will place expensive and severe strains on the European economies, particularly on its health care and social systems." (Helle Dale published by the Heritage Foundation)
Monte Carlo: How a Useful Actuarial Tool Came to be Named After International Capital of Gambling (PDF)
5 pages. (Contingencies Magazine)
Side-by-Side Comparison of Executive Compensation Bills
4-page document from ERIC entitled 'Comparison of Current Non-Qualified Deferred Compensation Rules with Proposed Changes In H.R. 2896/S. 1637." (ERISA Industry Committee)
Text of American Benefits Council's Comments on Proposed Changes to EFAST Program (PDF)
6 pages. Excerpt: "we appreciate the opportunity to comment in writing on potential changes to the Employee Retirement Income Security Act of 1974 (ERISA) Filing Acceptance System (EFAST), an automated document processing system that uses computer-scanable forms and electronic filing technologies to process Form 5500 Annual Return/Report of Employee Benefit Plan and the Form 5500-EZ ... (American Benefits Council)
Making the Internet a Little Easier On Aging Eyes
Excerpt: "Lots of people dread having to read long articles on a computer screen. For many folks, especially aging baby boomers, the font size on Web sites seems to be getting mysteriously smaller year after year, causing them to squint, change glasses and crane their necks to see the screen clearly." (Wall Street Journal via SFGate.com)
Retooling Executive Compensation
Excerpt: "Outsized retirement packages and lavish perks may be losing favor, replaced by stress counseling and lifestyle coaching as companies retool their executive-benefit offerings for a new era." (Human Resource Executive)
Revised White-Collar DOL Overtime Regulations — a New Focus in an Uncertain Arena
Excerpt: "The United States Department of Labor has issued final regulations which make across-the-board changes in the definition of overtime-exempt, white-collar employees. These are the first such changes to be made since 1949 in the definition of overtime-exempt employees under the Fair Labor Standards Act." (Littler Mendelson)
Hewitt Research Report: HR Practices of Double-Digit Growth Companies
Excerpt: "Hewitt Associates conducted a multifaceted research study, in partnership with Michael Treacy, author of Double-Digit Growth: How Great Companies Achieve It -- No Matter What, to better understand the organizational drivers of double digit growth. Our work identified some fundamental characteristics and organizational, leadership, and HR practices that contribute to the success of double-digit growth (DDG) companies." (Hewitt)
Forbes Reviews New Fiction by Former PWBA Chief
Excerpt: "Robert A.G. Monks is a man for all seasons. A corporate lawyer turned takeover buccaneer, Monks went on to become the pension administrator of the U.S. Labor Department and thus reinvented himself as an early and uncompromising advocate of corporate governance reform when the movement was just in its infancy." (Forbes.com)
Opinion: 21st Century Employee Benefits Communication? Well, Almost
Excerpt: "Companies used to mail a video or cassette to each employee's home in an attempt to get the family involved. Think about that for a moment. We used to mail stuff home, and now we limit Web-based information and transactions to at-work access. What am I missing here?" (Richard Quinn on BenefitNews.com)
Newly Posted Events
Consumer Directed Health Plans and Health Savings Accounts
in California on May 25, 2004
presented by ArlenGroup and BDO Seidman, LLP
Consumer Directed Health Plans and Health Savings Accounts
in California on May 27, 2004
presented by ArlenGroup and BDO Seidman, LLP
May Day for the Uninsured: Will We Ever Achieve Health Care for All?
in District of Columbia on May 3, 2004
presented by Kaiser Family Foundation
The Cost of Care for the Uninsured: What Do We Spend & Who Pays?
in District of Columbia on May 10, 2004
presented by Kaiser Family Foundation
Newly Posted Press Releases
Newkirk Booklet Identifies Overtime Regulation Changes For Employers
(Newkirk)
Continuing Decline of Pension Plans Likely to Hit Younger Workers & Families the Hardest, Study Shows; 'A Demographic Time Bomb is Ticking, and the Time to Act is Now'
(Employee Benefit Research Institute (EBRI))
RAND Study Shows People At Risk Of Receiving Poor Health Care In All Parts Of The United States
(RAND Corporation)
Newly Posted or Renewed Job Openings
Health & Welfare Consultant
for Towers Perrin
in CT, DC, NJ, NY, OH, TX
Defined Benefit Conversion Specialist
for New York Life Investment Management LLC
in MA
Defined Contribution Administrator
for Full service retirement plan firm in business over 21 years
in IL
Account Executive - Benefits
for Exclusive with Hufnell, Inc, Recruiters, Talent Acquisition - Benefits & Trust
in DE, NJ, PA
Pension Administrator
for FBD Consulting, Inc.
in KS
Lateral Attorney
for Slevin & Hart, P.C.
in DC
Plan Administrator/Account Manager
for Pension Services Corporation
in MO
Regional Sales Executive
for Trust Company of America
in AR, IA, IL, KS, KY, LA, MN, MO, MS, ND, NE, OH, OK, SD, TN, TX, WI
Defined Contribution Administrator
for The Pension Service, Inc.
in CT, MA, ME, NH, NY, RI, VT
Benefits Analyst
for New York City Transit
in NY
General Administrator
for PSC-CUNY Welfare Fund
in NY
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