BenefitsLink Retirement Plans Newsletter for June 28, 2004

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Retirement Plans
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June 28, 2004

Today's sponsor: The Retirement Planning Center

(Click on company name or banner to learn more.)

ANNOUNCING: Advanced Version of Retirement Planning Center
A website for creating the best plan for a client
Proposals for New Comparability, Defined Benefits,
Integrated Plans, Sole Proprietorships, etc.
Live Chat, Wizard & Upload Data for ease of use
And now . . . more powerful features include:
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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)

Fidelity Toughens Up on Soft Dollars
Excerpt: "Fidelity Investments, escalating its campaign against an age-old Wall Street business practice, is changing the way it pays brokerage commissions. Starting July 1, the nation's largest mutual-fund company will stop paying extra sums in brokerage commissions to gain access to market data from Bloomberg LP and other information providers, Fidelity Investments executives said." (Wall Street Journal via SFGate.com)

Thousands of Texas Teachers Retiring Before 'Loophole' Closes
Excerpt: "[P]rivate companies have been inundated with requests for help with the paperwork. To qualify for both their state pension and Social Security benefits, teachers must work at least one day at any of the handful of school districts across the state that pay into both systems. Over the past year, the Houston-based firm of Martin & Associates has helped more than 3,000 retiring teachers find such temporary placements for a $700 fee." (Houston Chronicle)

Pension Reform Deal Reached In California
Excerpt: "Under the plan, current employees give up nothing. But new hires who do not work in public safety would not receive a state pension match -- ranging from 16 to 17 percent of their salary -- for their first two years on the job. The new employees could contribute 5 percent of their salary to an interest-bearing, tax-free account for those two years. After that, they could take that money for whatever they wanted and enter the state pension system as a first-year employee." ([San Jose] Mercury News; one-time registration required)

Text of ERISA Industry Committee's Comments on Proposed 411(d)(6) Anti-Cutback Regulations (PDF)
12 pages; 6/22/04. (ERISA Industry Committee)

Funding of Corporate Pension Plans: Is “the Sky Falling”?
Excerpt: "For several years media headlines have proclaimed dire predictions for the future of the defined benefit (DB) system, as many private DB pension plans began surfacing as underfunded during the bear market. News reports still refer to 'the pension funding crisis' and 'widening pension funding gaps.' But is the pension system really in crisis?" (The Vanguard Group)

Text of PBGC Semi-Annual Agenda (PDF)
3 pages. (Pension Benefit Guaranty Corporation)

IRS Strengthening Its Enforcement Initiatives
Excerpt: "IRS enforcement initiatives in the employee plans arena was the ongoing theme of Tuesday's meeting of the Mid-Atlantic Pension Liaison Group held in Philadelphia." (Attorney B. Janell Grier on BenefitsBlog)

Pension Plan Funding Regains Some Lost Ground
Excerpt: "Despite significant increases in plan liabilities, the average funded status of pension plans sponsored by Fortune 1000 companies rose from 82 percent in 2002 to 88 percent in 2003, according to their annual reports." (Watson Wyatt)

Opinion: How to Boost Returns in Overpriced Retirement Plans
Excerpt: "Seemingly small differences in expenses make a huge difference in retirement. Compare, for example, a $1 million portfolio at three different expense levels, compounded at 5 percent return over 30 years and withdrawn at age 60 at a rate of 4 percent a year ..." (John Wasik on Bloomberg.com)

Opinion: Reforming Hedge Funds
Excerpt: "Rather than compel all hedge funds to register with the commission, a law could require pension plans to stick with registered hedge funds." (New York Times; one-time registration required)

How Sick Is Social Security? Perhaps Not As Sick As You Think
Excerpt: "With questions about Social Security's future sure to play a role in this year's presidential election, we decided to ask economists and policy makers across the country about the health of the program. Here are some answers, including a primer on the system." (Wall Street Journal via SFGate.com)

Links to Items on Executive Comp, Benefits in General

Shift Away from Stock Options Requires Companies to Reconsider Section 162(m) Compliance (PDF)
At pp. 1-2 of 6-page document. Excerpt: "If your company is considering a shift away from stock options to other forms of stock compensation, one of the issues that you need to address is how to ensure that 100% of the income recognized by the employees under these alternative stock compensation vehicles is deductible by the company." (Trucker Huss)

Overview: Congress Ready To Change Rules On Executive Compensation Programs (PDF)
3 pages. Excerpt: "An international tax bill (S.1637) approved by the Senate on May 11 and a similar bill (H.R. 4520) approved by the House on June 17 both include provisions that would significantly affect current nonqualified deferred compensation arrangements. The new requirements would subject future deferrals to immediate taxation if certain conditions are not satisfied." (Mellon's Human Resources & Investor Solutions)

IRS and Congress Target Exempt Organizations' Executive Compensation Practices
Excerpt: "The Internal Revenue Service recently announced its plans to contact hundreds of tax-exempt organizations (EOs) this summer regarding the compensation paid to their highest paid employees. The IRS has also announced that it will be reviewing transactions reported on the Form 990 by Section 501(c)(3) and 501(c)(4) tax-exempt organizations as 'excess benefit transactions,' as well as any failure of an EO to indicate on the Form 990 whether it has had any excess benefit transactions." (McDermott, Will & Emery)

FASB ED On Stock Option Accounting/Valuation Draws Comments
Excerpt: "Summary of FEI Committee on Corporate Reporting (CCR) Response To FASB Exposure Draft on Share-Based Payments" (Financial Executives International)

Newly Posted Press Releases
(Post Yours!)

Treasury and IRS Make It Easier To Design Health Savings Accounts
(Internal Revenue Service (IRS))

Snow Statement on the Introduction of the President's Retirement Savings Account Proposal
(Internal Revenue Service (IRS))

Managed Account Architect Launches MS&I Solutions
(MS&I Solutions)

Newly Posted or Renewed Job Openings

Director of Benefits
for Ohio Public Employees Retirement System
in OH

Flex Plan Processor
for Leggette Actuaries, Inc.
in TX

Pension Analyst- Implementation
for CitiStreet - A State Street and Citigroup company
in MA

401(k) Client Relationship Manager
for Great-West Retirement Services
in FL

Benefit Plan Consultant – Experienced
for Hewitt Associates
in FL

Defined Benefits Consultant/Project Manager
for Lynchval Systems Worldwide, Inc.
in VA

Business Development Officer – Institutional Trust & Custody
for U.S. Bank
in UT

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