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July 14, 2004
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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)
'Defined Cost'-- New Hope for Defined Benefit Plans (PDF)
4 pages. Excerpt: "Defined contribution plans have their place and offer some significant advantages, but they can't match defined benefit plans in providing dependable, lifetime retirement income. The time may be ripe for a new type of retirement plan-- the defined cost pension plan (DCPP)." (Contingencies Magazine)

Fees Loom As Basis For Next Wave of Lawsuits Against 401(k) Sponsors
Excerpt: "[M]utual fund fees most likely will be the focus of the next generation of ERISA class action lawsuits, some prominent pension attorneys say. Mutual fund fees are ripe for lawsuits because the three-year market downturn has made participants aware that high fees could have a negative impact on retirement savings." (PLANSPONSOR.com; one-time registration required)

Federal Government Garnishments of Qualified Plan Benefits
Excerpt: "[A] recently issued private letter ruling addresses some of the issues that arise when the United States government is the litigant seeking to enforce a court judgment against a 'debtor' who is a plan participant. As always, PLRs apply only to the party seeking the ruling and cannot be used as precedent. Nevertheless they are valuable guidance for those in similar fact situations." (Deloitte's Washington Bulletin)

Bridging the Retirement Income Gap
Excerpt: "While banks and brokers focus on asset accumulation, a huge opportunity awaits in the management of retirement asset distributions." (American Banker Online; one-time registration required)

SEC Fee Probe Could Push Brokers From Marketplace
Excerpt: "The Securities and Exchange Commission's probe into how and why mutual fund firms pay to have their funds offered by defined contribution plans could push brokers out of the retirement marketplace if sales and service compensation are reduced or eliminated as a result. This would add momentum to the trend toward advisory services that are fee-based and investment neutral." (Defined Contribution News)

Why Brokers Want You To Buy 'B Shares' and Other Questionable Investments
Excerpt: "Just follow the money. Variable annuities, mutual-fund B shares and brokerage firms' in-house mutual funds rank among Wall Street's more dubious offerings. Yet brokers are often relentless in pushing these products, even when they aren't in the client's best interest." (Wall Street Journal via SFGate.com)

SEC Seeks to Clamp Oversight on Hedge Funds
Excerpt: "Federal regulators are proposing to clamp new oversight on hedge funds, traditionally investment pools for the wealthy that are growing and largely unregulated." (AP via the New York Times; one-time registration required)

Why Europeans Shouldn't Save For Retirement Yet
Excerpt: "France isn't the only country shunning IRAs. Britain and Germany both introduced such schemes in 2001, but only 3% of eligible Britons and fewer than 2% of Germans have signed up. That's a far cry from the U.S., where at least one-third of households have IRAs, and 50 million workers save for retirement through employer-sponsored 401(k) plans." (BusinessWeek)

Links to Items on Executive Comp, Benefits in General

TIR 04-17: Massachusetts Tax Issues Associated with Same-Sex Marriages
Excerpt: "Where elements of Massachusetts taxation derive from federal law, such as the definition of gross income, or state deductions that are based on a federal counterpart, same-sex spouses may need to perform special calculations to arrive at the proper Massachusetts tax figure. This technical information release discusses these tax issues." (Massachusetts Department of Revenue)

CEOs Getting Deferred Compensation Perks
Excerpt: "While many corporations allow top executives to defer part of their multimillion dollar pay for tax purposes, some companies give those executives interest on that deferred compensation which is far more generous than an ordinary person can get through a money market fund or a bank CD. Some companies go even further, paying a guaranteed interest rate on par with the return an average investor might hope for from stocks, but with none of the risk." (AP via the New York Times; one-time registration required)

Washington Wrap-Up, as of July 12, 2004 (PDF)
Excerpt: "Federal Legislative and Regulatory Proposals of Interest to NCTR Members" (National Council on Teacher Retirement)

Newly Posted Events

ERISA Intact: The Holding and Implications of the Supreme Court's Decision in Aetna v. Davila
Nationwide on July 20, 2004
presented by HMOs and Health Plans Practice Group

New Medicare Prescription Drug Act--What does it mean for your plan?
Nationwide on July 22, 2004
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases

California Casualty Gets Relief With Ceridian Human Resource Solutions
(Ceridian)

U.S. Labor Secretary Elaine L. Chao Launches Wi$e Up Financial Education Program at the University of Texas at Dallas
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)

Mortgage Benefits Corp. Announces Agreement to Provide Group Mortgage Benefit to Gray Cary Law Firm
(Mortgage Benefits Corporation)
Newly Posted or Renewed Job Openings
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