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June 24, 2004
Today's sponsor: DATAIR Employee Benefit Systems, 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)
IRS Plans to Issue Guidance Regulations for 403(b) Plans
Excerpt: "We're still a few weeks off from the due date, but it's safe to say that the Internal Revenue Service is gearing up to fit 403(b) plan regulation in line with the 2001 tax law changes. Sources say this will be the first time that the IRS has made sweeping comprehensive changes to these plan rules since 1964." (Financial-Planning.com)

Private Investor Might Hit UAL's Pensions
Excerpt: "In addition to demanding board seats and a large amount of control in the airline, an outside investor's primary cost-cutting concern will be the unwieldy pension-deficit bills, which will cost United more than $4 billion over the next five years." (Forbes.com)

Legislators Reject Bill to Prevent Public Safety Pensions from Covering '911' Operators, Others
Excerpt: "An Assembly committee on Wednesday rejected a controversial bill that would have denied special public safety pensions to about 3,000 state workers, including Department of Motor Vehicles driving examiners and emergency dispatchers." (Sacramento Bee)

Overview: Acceptance of Enhanced Pension Benefits for Waiving Retiree Health = Reduction In Coverage
Excerpt: "When an individual entitled to retiree health benefits from an account that is part of his employer's defined benefit plan accepts his employer's offer to waive those health benefits in exchange for enhanced retirement benefits, the employer has effectively reduced retiree health coverage, the IRS has ruled." (CCH News & Information Library)

Auditing Your Retirement Plan Fees: What Are You Really Paying?
Excerpt: "[D]iscovering the 'hidden fees' you may be paying isn't always easy. To find this information, a growing number of employers are turning to audits that pinpoint 'revenue sharing,' various fees that mutual-fund companies pay to brokers, third-party administrators and other service providers. Paid out of plan assets, these fees -- as much as $1.5 billion annually, according to one estimate -- are often not disclosed, leaving employers in the dark about total plan costs." (Society of Human Resource Management)

Tracking a 'Lost' Pension
Excerpt: "Claiming a pension benefit for a retiree or older workers from a past employer or company no longer in business is difficult but not insurmountable. Federal law provides certain rights to pension claimants while federal and state agencies, along with the Internet, furnish records to help prove a claimant's right to a pension." (Missouri Bar Journal)

America's Top Recordkeepers: 2004
Excerpt: "[T]he Recordkeeping Survey gives employers the chance to see exactly which products and services each provider offers, as well as listing information on total assets and overall client demographics. This survey ... is comprised of data collected from the providers themselves." (PLANSPONSOR.com; one-time registration required)

Summer 2004 Issue of Employee Plan News Published by IRS (PDF)
16 pages. Articles include 'Common Audit CAP Issues,' 'Did GUST Blow Right by You,' 'Update: Employers' Obligations to Veterans." (Internal Revenue Service)

Guide to SEC's New Requirements for Mutual Fund Boards (PDF)
2 pages. Excerpt: "[F]und directors are fiduciaries, but the fiduciary standard of care associated with fund management actually is a lesser standard than that imposed on fiduciaries regulated by other federal and state agencies." (Foundation for Fiduciary Studies)

Mutual Funds and the U.S. Retirement Market in 2003 (PDF)
20 pages; published June 2004. (Investment Company Institute)

SEC Requires Independent Chairmen for Mutual Funds
Excerpt: "A sharply divided Securities and Exchange Commission yesterday approved a rule forcing mutual fund boards to pick independent chairmen -- a move designed to stamp out conflicts of interest and to promote lower fees for investors." (Washington Post; one-time registration required)

SEC Changes Rules for Mutual Fund Industry
Excerpt: "The Security and Exchange Commission votes to change the way mutual funds are governed. Under the new rule, the chairmen of mutual fund boards will now be more independent from the companies that manage the funds. The change was vigorously opposed by the fund industry. NPR's Chris Arnold reports." (National Public Radio)

Some Businesses Say Corporate Governance Efforts by Pension Trustees, Others Can Go Too Far
Excerpt: "Business officials are challenging the new post-Enron rules, calling them harsh and costly. They're blasting the two strongest forces in the governance movement: California Public Employees' Retirement System (Calpers), the public pension fund giant, and Institutional Shareholder Services (ISS), the No. 1 proxy-advisory firm." (USA Today)

Overview: SEC Requires Enhanced Disclosure of Breakpoint Discounts by Mutual Funds
Excerpt: "Breakpoints are the investment levels required to obtain a discount on a front-end sales load, which is a sales charge that is often imposed on mutual fund shares sold through an intermediary such as a broker-dealer. The regulations are being issued in connection with the SEC's concerns regarding the failure by many brokerage firms to deliver mutual fund breakpoint discounts." (CCH News & Information Library)

Opinion: It's More Bad News for Social Security
Excerpt: "Last week, the Congressional Budget Office (CBO) released a report suggesting there will be a slightly lower actuarial deficit and a later insolvency date than previously estimated by the Social Security Administration itself.... [E]ven using CBO's more optimistic technical assumptions, Social Security remains unsustainable: unable to pay promised future benefits given current tax revenues." (Michael Tanner in the Washington Times)

Links to Items on Executive Comp, Benefits in General

Planning For Same-Sex Marriages in Massachusetts
Excerpt: "In the case of ERISA, which is riddled with protective provisions for 'spouses', much will depend on the language of the Plan, and whether it uses insurance products to deliver benefits. Action is required, regardless of whether the employer is enthusiastic (or less so) about this new Massachusetts development. Similar considerations will apply in the case of other federal workplace mandates, such as COBRA and FMLA." (Rackemann, Sawyer & Brewster)

50-State Rundown on G.ay Marriage Laws
Excerpt: "Since the Massachusetts Supreme Judicial Court ruling, more than 35 states have introduced legislation aimed at preserving the traditional definition of marriage as a union between a man and a woman." (StateLine.org)

Domestic Partner Benefits to be Included in Illinois Government Workers' Plan
Excerpt: "Same-sex partners of AFSCME labor union members would be entitled to insurance benefits in the third year of the contract negotiated with the state. That has some union members angry, lawmakers frustrated and union officials defensive." (Quincy [Illinois] Herald-Whig)

Hewitt Federal Legislation Quick Guide: June 22, 2004
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law, regarding health and welfare benefit plans, retirement plans, and human resources and employment law. Click ... to learn more about pending legislation in each area. These files were updated on June 22, 2004." (Hewitt)

Dear FASB: Don't Change Stock Option Accounting
Excerpt: "For 2 1/2 months, the letters and e-mails have flooded in -- some angry, some worried, some pleading. There are hundreds of cut-and-paste form letters from tech workers at companies like Intel. But there are also many heartfelt notes, sometimes written in faltering English. The topic triggering the emotional outpouring: an arcane accounting rule change for stock options." (SiliconValley.com)

EBay Shareholders Nix Options Expensing
Excerpt: "A preliminary count at eBay's annual meeting in New Orleans showed that 59 percent of shareholders votes rejected the nonbinding proposal." (Reuters via Washington Post; one-time registration required)

Newly Posted Events

NTSAA Summer Symposia
Nationwide on August 4, 2004
presented by National Tax Sheltered Accounts Association

Teleconference Briefing - New Restrictions on Deferred Compensation
Nationwide on June 29, 2004
presented by Seyfarth Shaw LLP
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Benefits Consultant
for Hewitt Associates
in NJ

Project Coordinator
for The Segal Company is an employee benefits, human resources consulting firm
in DC

Manager, Retirement Services
for The Newport Group
in NC

Retirement Planning Advisor
for Merrill Lynch
in OH

Employee Benefits & Executive Compensation Associate
for Piper Rudnick LLP
in MD

401(k) Service & Sales Associate
for A Financial Services Company- A Metrowest Family Business
in MA

Operations Manager
for Susquehanna Patriot Bank
in PA

Senior Pension/ 401 (k) Administrator - Takeover
for Polycomp Administrative Services, Inc.
in CA

Experienced 401(k)/Defined Contribution Administrator/Consultant
for Growing Northern Central New Jersey Benefits Consulting Firm
in NJ

Senior Compliance Specialist
for AMVESCAP Retirement, Inc.
in GA

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