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July 8, 2004
Today's sponsor: Actuarial Systems Corporation

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

ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS
ASC provides complete automation for the pension office,
including: DC/401(k) and DB administration and valuation
systems, sophisticated Compliance Testing, DV Direct Daily
Valuation, Advanced Information Manager Database (AIM),
and Single-Step Processing. All ASC Technical Support Members
were experienced Pension Administrators or Actuaries before
joining ASC-- and most have been with ASC for over 10 years.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Prepared Testimony for Hearing on 'Examining Cash Balance Pension Plans: Separating Myth from Fact'
July 7, 2004. Witnesses included James Delaplane, Jr. for the American Benefits Council; Ellen Collier, Eaton Corporation; Dr. Robert Clark, North Carolina State University; Robert Hill, Hill & Robbins; and Nancy Pfotenhauer, Independent Women's Forum. (U.S. House of Representatives Committee on Education and the Workforce)

How Closely Do Spouses Coordinate Their Retirement Decisions? (PDF)
8 pages. Excerpt: "The evidence suggests that couples like to retire together and, since husbands tend to be older than their wives, the increased labor force participation of women may lead to later retirement of men. This brief examines retirement behavior and measures the extent to which husbands and wives appear to coordinate their retirement decisions." (Center for Retirement Research at Boston College)

Opinion: Houston's Police Pension Plan is Flawed
Excerpt: "[S]everal times since 1998 the benefit formulas were made more generous.... [B]ecause of a strong stock market and faulty projections, few if any realized that the combined effects of these changes created an actuarial time bomb. Prior pension analyses failed to account for the cumulative effect of higher police pay, benefits based on a final paycheck, a lack of contributions to the fund by those with deferred retirement accounts, a higher average age of police ..." (Mayor Bill White in the Houston Chronicle)

Opinion: Litigious Houston Police Pension Board Helped To Create the Mess
Excerpt: "Mayor Bill White's administration, the Houston Police Officers' Pension System and city taxpayers have a serious problem: The pension system's future liabilities exceed its projected income and contributions by $800 million. Unfortunately for the city and the public, the pension system board has filed a lawsuit to make city taxpayers pay the system $53 million this fiscal year." (Houston Chronicle)

San Diego Mayor Unveils Proposals for Pension Fix
Excerpt: "The pension system has a $1.15 billion deficit and unfunded retiree health care costs estimated at between $600 million and $938 million. The deficit is the result of benefit hikes, the 2000-2002 stock market decline and eight years of underfunding by City Hall, including in a 2002 deal approved by [Mayor Dick] Murphy and the City Council." (San Diego Union-Tribune)

Failed Daily Valuation System at Thrift Savings Plan Cost Taxpayers Millions, Senators Say
Excerpt: "A failed computer project at the Thrift Savings Plan wasted $36 million in federal retirement assets and cost government employees an additional $33 million in developmental costs for a replacement system, a Senate investigation found." (Washington Post; one-time registration required)

Why IRA Distribution Expertise is so Important
Excerpt: "The new rules have not, in fact, made planning simpler; they have simply replaced one set of planning opportunities with another. In this article, you will learn a few of the expensive mistakes that many IRA owners encounter and how you can use superior knowledge to attract IRA and qualified plan assets." (On Wall Street)

Louisiana Governor Vetoes Retirement Boost for Legislative Workers
Excerpt: "Gov. Kathleen Blanco vetoed bills that bumped up retirement benefits for legislative employees only -- legislation that had sparked complaints the benefits were unfair and would add further debt to Louisiana's retirement systems. Both measures would have increased retirement benefits for about 500 legislative workers, but not 65,000 other state employees ..." ([New Orleans] Times-Picayune)

Overview: Recent Guidance and the Anti-Cutback Rule (PDF)
12 pages. Excerpt: "The discussion of the anti-cutback rule that follows includes the interpretive guidance provided by the proposed regulations. This article also briefly discusses a recent U.S. Supreme Court decision on the anticutback rule." (White & Case LLP)

Father of the 401(k) Has Another Child
Excerpt: "Ted Benna forms new third-party administrator aimed at financial advisers in the 401(k) market." (Financial-Planning.com)

The Decline of Private-Sector Defined Benefit Promises and Annuity Payments: What Will It Mean?
Summary. Excerpt: "This issue of EBRI Notes summarizes materials presented at a policy forum sponsored by EBRI May 6, 2004, on the implications of new research that projects the outcome if pensions virtually disappeared. Who would feel the greatest impact? How much would be lost? What would the impact be on retirement security, retirement policy and the nation's economy?' The full document can be purchased at http://www.ebri.org/store/notes.htm (Employee Benefit Research Institute (EBRI))

Opinion: It's About Time the SEC Shined Some Light on 401(k) Fees
Excerpt: "Most employees have no idea how much they are paying to participate in a 401(k) plan, where their fees are going and what they're getting in return. Their employers, in many cases, are nearly as ignorant. That's because most employees and employers don't ask the right questions and because the incestuous 401(k) industry does its best to keep them in the dark." (Kathleen Pender on SFGate.com)

Links to Items on Executive Comp, Benefits in General

Chart: Nonqualified Deferred Compensation Legislative Proposals (PDF)
11 pages; dated July 7, 2004. (Miller & Chevalier Chartered)

Hewitt Federal Legislation Quick Guide: July 6, 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 July 6, 2004." (Hewitt)

Stock Option Grants Fall Off in High-Tech Sector
Excerpt: "Across the industry, the use of broad-based stock option grants decreased by approximately 15% to 20%, according to two new studies released by Mellon Financial Corporation's Human Resources & Investor Solutions (HR&IS)." (PLANSPONSOR.com; one-time registration required)

Newly Posted Events

Essentials of Public Sector Benefits Administration
in Wisconsin on September 27, 2004
presented by International Foundation of Employee Benefit Plans

Get the Most Out of Your ESOP
in Missouri on October 4, 2004
presented by National Center for Employee Ownership

Handling the ESOP Repurchase Obligation
Nationwide on November 9, 2004
presented by National Center for Employee Ownership

Introduction to ESOPs
Nationwide on November 16, 2004
presented by National Center for Employee Ownership

Maintaining an Ownership Culture
Nationwide on December 7, 2004
presented by National Center for Employee Ownership

S Corporation ESOPs
Nationwide on December 9, 2004
presented by National Center for Employee Ownership
Newly Posted Press Releases

Council Urges Education and Workforce Panel to Provide Legislative Clarity and Certainty for Hybrid Pensions
(American Benefits Council)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Tax Manager or Heavy Senior
for Deloitte
in NC

Retirement Services Sales Manager/Director (So. Cal.)
for ADP Retirement Services
in CA

Retirement Services District Manager (So. Cal.)
for ADP Retirement Services
in CA

Retirement Benefits Consultant
for Mand Marblestone & Danziger, P.C.
in PA

401(k) Administrator
for Alliance Benefit Group of New England
in NH

Implementation Consultant
for Administaff
in TX

Pension Paralegal / Plan Administrator
for Actuarial consulting and administration firm
in NY

ERISA Counsel
for The 401(k) Company
in TX

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