BenefitsLink Retirement Plans Newsletter for July 12, 2004

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Retirement Plans
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July 12, 2004

Today's sponsor: The Retirement Planning Center

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ANNOUNCING: Advanced Version of Retirement Planning Center
Web based retirement plan design and proposal system.
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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)

401(k) Segregated Investment Account? Make Mine Managed
Excerpt: "The concept of hiring an investment manager to invest retirement funds on behalf of a company and its employees, as stipulated under ERISA Sec. 405(d), is not new. However, plan providers and other retirement planning experts contend that the stock market decline that characterized the first years of this century has prompted plan sponsors to start including such funds in their lineups of investment options." (BenefitNews.com)

Mindful of 401(k) Monkeys
Excerpt: "Have you heard the story of 'The Three Really Big Monkeys and the Fiduciary'? Listen. 'Workers have a monkey on their back. That's why they're retiring to despair. Actually, it's a bunch of monkeys – really big monkeys.' The storyteller is Brooks Hamilton, who's both a benefits attorney and a computer geek." (Scott Burns in the Dallas Morning News; one-time registration required)

California Municipalities Struggle to Pay Pensions
Excerpt: "Cities and counties across California are mirroring the state by going to what some say are extraordinary lengths to pay for generous pension benefits granted in recent years to public employees. Some localities are restructuring obligations to the state's pension fund while others are seeking to issue bonds to cover unexpectedly high pension costs." (Los Angeles Times; one-time registration required)

Q&A with the PBGC's Bradley Belt
Excerpt: "The new executive director talks about the major reforms that need to be made to ensure the health of pension systems." (BusinessWeek)

IRS Releases 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G (PDF)
19 pages. (Internal Revenue Service)

DOL Advisory Opinion 2004-07A: Fidelity Bond Rules for Trust Company Subsidiary of Bank Holding Co.
June 21, 2004. Excerpt: "[Y]ou ask whether the First Commonwealth Trust Company (FCTC) is exempt from ERISA's fidelity bonding requirement pursuant to the statutory exemption in section 412(a)(2) of ERISA with respect to plans for which FCTC acts in a fiduciary capacity. You also ask whether FCTC would be covered by the regulatory exemption in 29 C.F.R. §§ 2580.412-27 and 412-28 applicable to certain banking institutions and trust companies subject to federal regulation." (Employee Benefit Security Administration, U.S. Department of Labor)

In New York, Mothers Call for Pension Reinstatement
Excerpt: "Many of the women were told to take their money out of the retirement system when they stopped working. When they returned, they found a new tier system that put them at the bottom, despite years of previous work, and almost no information about what that meant for their future." ([Albany NY] TimesUnion.com)

Overview: IRS Revises Procedures for Extensions of Period for Amortizing Unfunded Liability
Excerpt: " The revised procedures, which will apply to all ruling requests received after August 2, 2004, significantly expand the information required of sponsors and administrators of single-employer and multiemployer plans that are seeking an extension of the amortization period. However, the IRS has also provided a Model Notice and Checklist ..." (CCH News & Information Library)

Comparing Pensions Around the World
Excerpt: "U.S. businesses do pay the most for employee retirement, but rising costs are now becoming a global phenomenon." (BusinessWeek)

Opinion: Middlemen Have Hands in Your Retirement Funds
Excerpt: "Unsuspecting investors often foot the bill through reduced investment returns in expensive, sub-par funds. It's essential for you to know if these funds are placed in retirement plans through 'pay to play' or 'shelf space' deals where a broker earned a commission for recommending selected funds." (John Wasik on Bloomberg.com)

Opinion: Duty 'Calls'-- the Lack of Labor and the Need for Knowledge
Excerpt: "By and large, the US Department of Labor (DOL) has said little about the mutual fund scandals, about the impact on participants, and about the specific steps fiduciaries should take. I believe they are missing an opportunity to educate fiduciaries and participants, as well as investment providers, about ERISA's mandates. There is still time for the DOL to seize the moment and provide leadership and guidance for plan sponsors." (Reish Luftman Reicher & Cohen)

Welcome to new BenefitsLink advertiser PensionOnline.com
Excerpt: "[PensionOnline.com gives your small to mid-size business clients side-by-side analysis of the various retirement plans, all in a colorful, compliant, proposal-ready format. Let our 10+ years in the retirement software space help you maximize your client's wealth. Arrange for a trial subscription where you can run actual proposals with your client's census data. See for yourself how easy plan design can be. Request your free trial now"

Links to Items on Executive Comp, Benefits in General

Cafeteria/401(k) Plan Tax Savings Calculator
Excerpt: "Don't just tell your employees they can reduce their taxes by making pre-tax contributions to your benefit plans--let them see it for themselves! Increase participation by providing your employees with a powerful, easy-to-use tool to estimate their federal tax savings from participating in your benefit plans." (Employee Benefits Institute of America Inc. (EBIA))

As Same-Sex Couples Go Legal in New Jersey, Questions Swirl
Excerpt: "Domestic partners of state employees will get health and pension benefits, and local governments can decide to provide the same. As of June, at least three towns -- Maplewood, South Orange and Princeton Borough -- had passed such measures. Private employers do not have to provide benefits but many do so and the act will not interfere with that practice." (New Jersey Law Journal via Yahoo! Finance)

2004 State Legislative Sessions: Talk, Little Action In Most Legislatures
Excerpt: "After four years of bruising budget battles, state lawmakers this year jousted over gay marriage, skyrocketing health care costs and how to pay for schools. But when the dust settled, most states either put off deciding some of the tough issues for another time or opted to let voters decide this November." (StateLine.org)

Overview: Congress Considers Major Changes to Taxation of Deferred Compensation (PDF)
12 pages. Excerpt: "These changes, if enacted into law, would require substantial changes by employers to many types of deferred compensation plans, including not only bonus and salary deferral plans, but also potentially SERPs, excess plans, incentive plans, severance and golden handshake arrangements, expatriate arrangements, directors plans, and deferral plans for sales representatives and other independent contractors." (Miller & Chevalier Chartered)

Summary of House Energy and Commerce Subcommittee Hearing on FASB Stock Options Proposal (PDF)
2 pages. (American Benefits Council)

Newly Posted Events

Designing Your Life in Retirement: A Guide to Planning Your Future (Ongoing Webinar Series)
Nationwide on July 1, 2004
presented by Planning For Life

Designing Your Life in Retirement: A Guide to Planning Your Future (Ongoing Webinar Series)
Nationwide on August 1, 2004
presented by Planning For Life

Fundamentals of Qualified Plans
in Massachusetts on November 4, 2004
presented by SunGard Corbel

Fundamentals of Qualified Plans
in Texas on November 4, 2004
presented by SunGard Corbel

Fundamentals of Qualified Plans
in New York on November 18, 2004
presented by SunGard Corbel

Fundamentals of Qualified Plans
in Arizona on November 18, 2004
presented by SunGard Corbel

Fundamentals of Qualified Plans
in California on December 2, 2004
presented by SunGard Corbel

Summer Program: Absence Management in Healthcare Organizations
in Colorado on July 29, 2004
presented by Colorado Association of Healthcare Executives

The Enhanced Lifestyle Planner: Organize Your Thinking and Expand on Your Goals (Ongoing Webinar Series)
Nationwide on August 1, 2004
presented by Planning For Life

Newly Posted Press Releases

SunGard Corbel Pension Web Seminars Earn NASBA Approval for CPE
(SunGard Corbel)

Bankers Life and Casualty Improves Investment Product Sales with Innovative Product
(Metrics Partners)

Newly Posted or Renewed Job Openings

Health & Welfare Associate
for Towers Perrin
in CA, IL, NC, NJ, NY

Defined Benefit Implementation Specialists
for Constantin Control Associates
in NC, NJ

Account Executive-San Mateo
for Transamerica
in CA

Retirement Plan Sales Consultant
for Invesmart, Inc.
in CT, IL, MA, MD, ME, MI, NH, NY, OH, RI, TX, VA, WI

Retirement Plan Sales Consultant
for Lincoln Financial Advisors
in DC, MD

Plan Administrator/Consultant
for Top Tier Retirement Provider
in MN

Associate Director, Benefits
for Western & Southern Financial Group
in OH

Benefits Coordinator
for Wildman, Harrold, Allen & Dixon LLP
in IL

401K Compliance and Reporting Testing Analyst II
for Boston Financial Data Services
in MA

Handy Links:

Copyright 2004 BenefitsLink.com, Inc.; except that you can reprint this newsletter in full (including this boilerplate part) without obtaining our permission.

Published by:

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Editor and Publisher: David Rhett Baker, J.D.

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