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May 21 - 25, 2004 - 13585 subscribers
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Massachusetts Might Cloak Data To Attract Private Equity Funds to State Pension Plans
Excerpt: "A state Treasury proposal, tucked within House and Senate fiscal 2005 budget blueprints, would require much of the information related to state pension fund investments kept secret, and would exempt from the state public meeting law the pension fund board meetings in which that data is discussed." (Boston Business Journal via bizjournals.com; one-time registration required)
The Very Big Business of Private Equity
Excerpt: "Private companies operate largely out of sight of some regulatory agencies and even of industry experts, who often have difficulty assessing them. But according to Donald J. Gogel, the chief executive of Clayton, Dubilier & Rice, one of the oldest private-equity firms in the world, private companies are often better managed than their public counterparts. Following are excerpts from a conversation with him ..." (New York Times; one-time registration required)
United Methodist Church Bucks the Trend on Employee Pensions
Excerpt: "Earlier this month, the United Methodist Church voted at its quadrennial meeting to start an old-fashioned, defined-benefit pension plan for its 25,000 American pastors and lay employees - the very type of plan that so many companies have scuttled." (New York Times; one-time registration required)
Are Firms Underestimating Cost of Switching To 401(k)s?
Excerpt: "Against a rising tide of companies dumping their traditional pension plans, one industry expert is raising a red flag: Firms could face unforeseen costs in the future from abandoning such plans." (Investors.com)
Looks Like Open Season On Thrift Savings Plan's Open Season
Excerpt: "The bill, introduced Friday, would eliminate the TSP's twice-a-year 'open seasons,' the only time employees can change the amount they contribute toward retirement. It also would direct the Federal Retirement Thrift Investment Board, which oversees the TSP, to improve educational services for participants so that they will be better prepared to evaluate and compare investment opportunities offered by the 401(k)-type program." (Washington Post; one-time registration required)
401(k) Balances Jump
Excerpt: "Average 401(k) balances jumped 35 percent to $64,600 last year, exceeding 1999 levels for the first time, according to a new study. But most employees have been lax in managing their retirement plans, the study by Hewitt Associates found." (CNN Money)
Federal Employee Retirement Programs: Budget and Trust Fund Issues (PDF)
Excerpt: "In FY2004, the expenditures of the Civil Service Retirement and Disability Fund (CSRDF) are estimated to reach $52.8 billion, composed mostly of annuity payments to retirees and survivors. These expenditures will be 38% as large as the $137.6 billion paid as salary and wages to current employees. Expenditures from the retirement fund will increase over the next several years until they are about 45% as large as the payroll for current federal employees." (Congressional Research Service)
After the Storm: Next Steps for Multiemployer Pension Plans (PDF)
4 pages. (The Segal Company)
Opinion: Peering into New York State's Pension Pit
Excerpt: "Decisions by public officials in the late 1990s are now coming back to haunt local taxpayers, adding nearly a half-billion dollars in pension costs to all layers of government on Long Island.... Taxpayers, not surprisingly, are upset about this unexpected tab, caused in large part by pension fund losses in recent years." (Newsday)
Dear City of Houston Employees: Here's Why I Voted to Allow Retirement Benefit Cuts
Excerpt: "Some of you have said that by voting for Proposition 1, I was reneging on a promise to you. That's true. The problem is, I didn't make the promise. Neither did my 2 million fellow taxpayers. That promise was made by the pension board, and it was cooked up in a closed room. I'm not saying I expect to be at the table, but I do expect for someone who represents me to be at the table. It seems, however, nearly the entire board was made up of people who were beneficiaries ..." (Houston Chronicle)
Turmoil Looms In San Diego's Pension Fund Crisis
Excerpt: "San Diego's pension fund crisis has entered a serious new phase on two important fronts, with a federal grand jury taking testimony from city officials and a special committee preparing to recommend that City Hall take dramatic steps to close a $1.1 billion pension gap before it drives the municipal treasury to ruin." (San Diego Union-Tribune)
Opinion: Many Questions, Few Answers on Pension Consultants
Excerpt: "Diann Shipione, a trustee for the 77-year-old, $3 billion City of San Diego Employees Retirement System, asked all the right questions. She wanted to know why there was so little disclosure about how the consultant for the San Diego system was compensated by money managers it recommends." (John Wasik on Bloomberg.com)
Who Is Responsible For the Employer's Failure To Withhold Loan Payments?
Excerpt: "A recent Tax Court case addresses this issue. Since nearly all employers require the use of payroll deduction to repay participant loans, most practitioners have or will confront this issue. The employer's failure to withhold loan payments raises two issues: the tax consequences to the participant, and whether the employer has any liability." (SunGard Corbel)
US Airways' Bronner Hopes To Do For Airline What He's Done For Alabama
Excerpt: "Many of [Montgomery, Alabama's] signature buildings, including its tallest office tower, were built and financed by [David] Bronner's Retirement Systems of Alabama. It is hard to miss them downtown, along the Alabama River. Each carries the fund's name: There is the RSA Tower, the RSA Plaza, the RSA Activity Center and the RSA Pavilion Park, among others." (Pittsburgh Post-Gazette)
Some Texas Teachers Feel Forced Out by Benefits Law
Excerpt: "Teacher Lana Gates did not plan to retire at the end of this school year. Then, two weeks ago, she learned that staying longer would cost her hundreds of dollars each month in lost spousal Social Security benefits. Now she's one of nearly 50 school district employees who are ending their careers for this one reason at the end of the month." ([Wichita Falls, TX] TimesRecordNews.com)
Overview: Senate Finance Committee Releases Report and Summary of NESTEG Bill
Excerpt: "The NESTEG bill would require qualified DC plans invested in publicly traded securities to allow participants to diversify their investments in employer securities. Participants ... would have the immediate right to reinvest elective deferrals (and earnings thereon) that have been invested in employer stock. Participants ... with 3 or more years of service would be further empowered to reinvest employer contributions that have been invested in employer securities." (CCH News & Information Library)
May a Related Employer Maintain Separate Qualified Plans For Each Participating Employer?
Excerpt: "The answer to the question is 'yes.' In fact, the same answer would apply to an employer that is not part of a related employer group that wishes to maintain two plans for different groups of employees (e.g., divisions). Generally, the real question practitioners are asking when they ask such a question is how do we test the separate plans for coverage and nondiscrimination purposes." (SunGard Corbel)
CBO Study Analyzes Financial Impact of Delayed Retirement Age
Excerpt: "According to the CBO, most of its studies indicate that many baby boomers (which the CBO defines as those born between 1946 and 1964) are adequately prepared for retirement, although the CBO also stated that many boomers may experience a lower standard of living unless they retire later than they currently plan to." (CCH News & Information Library)
Opinion: Invest Time To Learn Long-Term Impact of Retirement Fund Fees
Excerpt: "While Congress debates legislation on mutual-fund soft dollars for research that raise internal fund-trading costs, directed brokerage deals and other hidden fees, it should mandate that employees see all these expenses in a point-of-purchase sticker format in their retirement plans." (John Wasik of Bloomberg.com via The Seattle Times)
Overview: Mutual Fund Trading Restrictions
Excerpt: "The SEC is proposing rules to require mutual funds to impose a 2% redemption fee on most transactions in which shares are held for five days or less. These fees are intended to prevent 'market timing' and other abuses, and to penalize short-term traders who gain at the expense of long-term investors." (SunGard Corbel)
Fund Executive, Fined $60 Million, Accepts Lifetime Ban
Excerpt: "Richard S. Strong, who helped fuel the extraordinary growth of mutual funds over the last three decades, agreed yesterday to pay $60 million and be banned from the financial industry for life to settle an investigation over rapid trades he made at the expense of investors in his funds." (New York Times; one-time registration required)
PBGC Posts $9.7B Deficit
Excerpt: "The government's pension insurance program reported on Friday a midyear deficit of $9.7 billion. The shortfall at the Pension Benefit Guaranty Corp. is for its single-employer pensions program as of March 31, the midpoint of the agency's fiscal year." (AP via Washington Post; one-time registration required)
Japanese Lose Faith in Their Social Security System
Excerpt: "71 percent of those polled favor major reforms to the existing pension system. Of the respondents, 70 percent also indicated their distrust of the pension system, the lowest rating among six previous surveys since 1997." (UPI via Washington Times)
Links to Items on Executive Comp, Benefits in General
'Actively Misled' Employees Entitled To Involuntary Termination Benefits
Excerpt: "In a suit filed by retired Chevron workers, the Ninth Circuit determined that those employees who had retired before an involuntary termination benefit program was under 'serious consideration' by Chevron, were nonetheless entitled to the benefits since they had been 'actively misled' by Chevron regarding the program's future availability. (Mathews v. Chevron Corp...." (RIA Tax News)
Opinion: CalPERS Protects Taxpayers, Pensioners
Excerpt: "As a CalPERS board member, I believe that we - as trustees of the nation's largest public pension fund - have a responsibility to take on corruption and market manipulation, and to do all that we can to restore integrity to this nation's boardrooms and financial markets.... To that end, I am proud of the actions we have taken at our state's pension funds and the good that we have done to push the markets to a greater degree of integrity, fairness and transparency ..." (Phil Angelides in the Sacramento Bee)
Opinion: CalPERS Betraying Its Mission
Excerpt: "What if you open a 401(k) plan with your employer and the plan manager decides to dabble in social causes instead of looking out for your retirement? Would you be mad? Of course you would. What if the plan manager for the retirement system for state employees decides to dabble in social causes, loses money, and because the state is required to make up for those losses, sticks taxpayers with the bill? Should they be mad?" (Bill Simon in the Sacramento Bee)
Opinion: To CalPERS, Retirees Take a Back Seat
Excerpt: "The blacklisted hospitals, CalPERS officials said, are charging too much to treat members of its health care system. Although the 10-1 exclusion vote by the CalPERS board was aimed, it said, at hospitals and physicians' groups whose bills far exceeded state norms, it just so happens that the action was taken as Sutter, the largest hospital chain in Northern California, and other hospital groups, were opening contract negotiations with the Service Employees International Union." (Victorville (Calif.) Daily Press)
Massachusetts Seeks to Invalidate Some Same-Sex Marriages
Excerpt: "Gov. Mitt Romney began cracking down Thursday on same-sex marriages by out-of-state couples, taking steps to invalidate their marriage licenses and asking the attorney general to consider taking action against the cities that issued them." (New York Times; one-time registration required)
IRS Warning on Questionable Employment Practices
Excerpt: "Although the warning applies to employment taxes, employers should take note that many of these schemes affect employee status and compensation, and therefore could affect an employer's liability for retirement plan benefits." (SunGard Corbel)
Deferred Compensation Planning Opportunities For Physicians Employed by Hospital-Controlled Entities
Excerpt: "Physicians employed by hospital-controlled, tax-exempt entities are often frustrated by their inability to duplicate the opportunities available in the for-profit sector to accumulate significant retirement plan assets during their periods of peak earnings." (Buchanan Ingersoll)
Newly Posted Events
Certificate Series - Basic Compensation Concepts
in Wisconsin on August 24, 2004
presented by International Foundation of Employee Benefit Plans
Certificate Series - Financial Planning Basics
in Wisconsin on August 9, 2004
presented by International Foundation of Employee Benefit Plans
Certificate Series - Investment Planning and Program Design
in Wisconsin on August 11, 2004
presented by International Foundation of Employee Benefit Plans
Certificate Series - Retirement Plan Basics
in Wisconsin on August 5, 2004
presented by International Foundation of Employee Benefit Plans
Certificate Series - Total Compensation and Organizational Strategies
in Wisconsin on August 30, 2004
presented by International Foundation of Employee Benefit Plans
Certificate Series - Variable Pay
in Wisconsin on August 26, 2004
presented by International Foundation of Employee Benefit Plans
Retirement Plan Services Graduate School
in South Carolina on October 10, 2004
presented by Cannon Financial Institute
Retirement Plan Services I & II School
in Indiana on July 18, 2004
presented by Cannon Financial Institute
Retirement Plan Services II School
in Massachusetts on August 1, 2004
presented by Cannon Financial Institute
Retirement Plan Services III and IV School
in North Carolina on June 13, 2004
presented by Cannon Financial Institute
Retirement Plan Services Sales School
in North Carolina on June 20, 2004
presented by Cannon Financial Institute
Newly Posted Press Releases
McKay Hochman Offers Four All-new Retirement Plan Education eSeminars
(McKay Hochman Co., Inc.)
Gilsbar, Inc. Appoints Director of Information Systems
(Gilsbar, Inc.)
The Principal Financial Group Launches Managed Accounts Program for Retirement Plan Investors
(Principal Financial Group)
Invesmart Selects Web Technology From Envisage Information Systems
(Metrics Partners)
Labor Department Announces Final Rules on Notices For COBRA Continuation Health Care Coverage
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
di Pretoro joins DailyAccess Management Team
(DailyAccess Corporation)
Newly Posted or Renewed Job Openings
Defined Benefit Calculation Specialists
for Constantin Control Associates
in IL, NC, NJ, NY, PA
Pension Administrator/Compliance Analyst
for CNA Trust
in IL
Senior Compliance Analyst
for CNA Trust
in CA
Account Executive
for Lockton Companies Inc.
in MO
Health and Welfare Benefits Manager
for Coors Brewing Company
in CO
Sales, Government Markets
for CitiStreet
in CO, VA
Pension Plan Coordinator
for Transamerica
in MA
Defined Contribution Plan Administrator
for Creative Benefit Strategies, Inc.
in OH
Account Specialist/Recordkeeper
for AMVESCAP Retirement
in RI
Plan Administrator
for Capital Investment Advisory
in FL
Account Manager
for Great-West Healthcare
in OR
Client Administrator
for Marsh Financial Services
in NJ
Client Services Consultants (St. Louis, Denver, and Washington D.C.)
for American United Life Insurance Company
in CO, DC, MO, VA
Pension Administrator
for Compensation Planning Inc
in RI
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