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May 12, 2004 - 13451 subscribers
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Text of IRS Notice 2004-40: May 2004 Interest Rates (PDF)
3 pages. Excerpt: "This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code. In addition, it provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II), and the weighted average interest rate and permissible ranges of interest rates based on the 30-year Treasury securities rate." (Internal Revenue Service)

Text of Mutual Funds' Association Letter to SEC on 12b-1 Fees
Excerpt: "The Investment Company Institute appreciates the opportunity to express its views on the Securities and Exchange Commission's proposal to amend Rule 12b-1 under the Investment Company Act of 1940 to prohibit mutual funds from paying for the distribution of their shares with brokerage commissions. The Institute generally supports the Commission's proposal ..." (Investment Company Institute)

Text of ERISA Industry Committee's Comments to SEC on Proposed 2% Redemption Fee
11 pages. Excerpt: "The ERISA Industry Committee ... is pleased to submit the following comments on the Commission's proposed rule ... requiring mutual funds to impose a 2% fee on the redemption of mutual fund shares purchased within the previous five days. The redemption fee, which would be retained by the mutual fund, is intended to require short-term investors to reimburse the mutual fund for costs incurred by the fund when the investors use the fund to engage in market timing ..." (ERISA Industry Committee)

Have It Your Way: the Evolution of Participant Investment Advice
Excerpt: "Do-it-for-me programs and vanishing fees finally may bring advice to the 401(k) masses." (PLANSPONSOR.com; one-time registration required)

2004 Online Advice Buyer's Guide from PLANSPONSOR.com
Excerpt: "In the pages that follow, we present a sampling of the online advice provider tools available, as well as some of the providers who offer some of these advice tools. The list is not all-inclusive; nonetheless, it offers a concise snapshot of the current landscape." (PLANSPONSOR.com; one-time registration required)

Whipsaw Calculation Was Required For Determining Lump-Sum Benefit from Cash Balance Plan
Excerpt: "For purposes of calculating a participant's early retirement benefit payable in the form of an immediate lump sum, a cash balance plan was required to use a 'whipsaw calculation' that would produce a payout larger than the participant's hypothetical account balance under the plan. (John D. West v. AK Steel Corporation Retirement Accumulation Pension Plan ..." (RIA Tax News)

Overview: Eliminating Optional Forms of Benefits (PDF)
2 pages. Excerpt: "The IRS has issued proposed rules that would allow defined benefit plan sponsors to streamline administration by reducing the number of distribution and early retirement benefit offerings under certain circumstances. The rules generally would permit plans to eliminate optional forms of benefit that are not 'core' options and are 'redundant' to retained forms of benefit within certain designated 'families.'" (Milliman USA)

Police Official Urges Rejection of Pension Proposition in Houston
Excerpt: "The head of the largest law enforcement organization in the country came to Houston Tuesday to urge voters to reject a proposition that would allow the city to shed a new state law that protects city employee pension funds." (Houston Chronicle)

Investment Unitization Proposal Fails in Vermont
Excerpt: "A measure designed to save the state's three public pension plans $1 million a year disintegrated Tuesday in the House, months after garnering widespread support in the Senate.... Called unitization, the measure would have allowed the funds to combine their money for investment, while maintaining separate identities for actuarial, accounting and asset allocation purposes." (The Times Argus Online)

Life Insurance Planning With Qualified Plans: What's Left After 2004 Guidance
Excerpt: "While quashing attempts by some insurance carriers to suppress policy values for tax purposes, recent guidance from the IRS and Treasury leaves intact many techniques for using insurance in a qualified plan." (BNA Tax Management)

Pension Reform Bill Passed in Japan
Excerpt: "A majority of lawmakers in the more powerful of Japan's two chambers approved the bill, which aims to save the system from collapse by gradually raising premiums over the next 14 years while lowering the minimum level of benefits ..." (AP via Washington Post; one-time registration required)

Another Question is Answered in the Who's the Employer Q&A Column
What tax write-offs do I get if I lease my employees? (BenefitsLink.com)

Links to Items on Executive Comp, Benefits in General

Senate Approves, Adds Non-Qualified Deferred Comp Provisions to JOBS Act
Excerpt: "Much was swept into S. 1637 Tuesday [5/11/04], except any provisions directly impacting COLI. My highlights or lowlights of the proposed JOBS Act added provisions pertaining to deferred comp plans include the following ..." (Thomas C. Walker via BenefitsLink Message Boards)

Merger Resulted In Change of Ownership Under Excess Parachute Payment Rules
Excerpt: "A corporation that merged into another corporation experienced a change in the ownership of a substantial portion of its assets when, due to the merger, its shareholders that acted as a group in the merger received a less-than-50-percent ownership interest in the second (survivor) corporation, according to an IRS technical advice memorandum.' [BenefitsLink editor's note: TAM 200415003 (released 4/9/04) is online at http://www.irs.gov/pub/irs-wd/0415003.pdf] (CCH News & Information Library)

Text of U.S. Chamber of Commerce's Comments on EFAST Filing System (PDF)
6 pages. Excerpt: "The core of the employer-provided retirement system is that it is a voluntary system from which plan sponsors may withdraw at any time. Therefore, when making changes, it is important to maintain choice and flexibility within the system that will encourage continued participation. We find that some of the proposals articulated by the Agencies will increase such choice and flexibility while others may decrease these characteristics." (U.S. Chamber of Commerce)

Recent Domestic Partner Developments Present Challenges For Employers
Excerpt: "Two recent court decisions by the Massachusetts Supreme Judicial Court and same-sex marriages in a number of states have created challenges for employers with employee benefit plans. Employers should consider the impact these developments will have on the design and the ongoing administration of their employee benefit plans." (McDermott, Will & Emery)

Boston Globe Coverage: Union Denies Benefits To G.ay Couples
Excerpt: "All employers and unions whose benefit plans are covered under the federal Employee Retirement Income Security Act of 1974 can choose whether to extend benefits to spouses of the same sex, said Matt Giuliani, a Boston lawyer specializing in employee benefits. That includes self-insured employers and unions, as opposed to those who buy insurance and benefit plans for their members, he said." (Boston Globe)

Coverage by The Advocate: Massachusetts Union Decides Not to Extend Benefits to Married Same-Sex Couples
Excerpt: "Trustees and administrators of the International Brotherhood of Electrical Workers Local 103 benefits plan issued a clarification of the phrase 'dependent spouse' to mean 'a person of the opposite sex.'" (The Advocate)

Newly Posted Events

Mercer's 2003 National Survey of Employer-Sponsored Health Plans
in Connecticut on May 26, 2004
presented by WEB (Worldwide Employee Benefits Network) Stamford Chapter
Newly Posted Press Releases

Evolution Benefits and BenefitPoint Team Up to Offer Brokers and Consultants Online Access to Benefits Debit Card Services
(Evolution Benefits)

Evolution Benefits Announces 2004 Technology Plans, Building On Industry Leading Capabilities
(Evolution Benefits)

DATAIR Updates Defined Benefit System for PFEA 2004
(DATAIR Employee Benefit Systems, Inc.)
Newly Posted or Renewed Job Openings
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Attorney
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