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July 27, 2004
Today's sponsor: DATAIR Employee Benefit Systems, Inc.

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

DATAIR Pension & Benefits Software Sale
License one DATAIR system and receive another one of equal or lower
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Regardless if you're just starting out in the business or looking to
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Cafeteria Administration     Cafeteria Plan Documents
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Contact sales@datair.com or call 1-888-328-2474.
(*Restrictions apply; see website for details.)

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
PBGC to United: You're Breaking the Law
Excerpt: "The U.S. government told United Airlines on Monday that the nation's No. 2 airline is violating federal law by suspending $568 million in payments to its pension plans. 'The decision to stop contributing to the pension plans is a serious matter that increases the risk of loss to plan participants and the federal pension insurance program,' wrote Bradley Belt, executive director of the U.S. Pension Benefit Guaranty Corp., in a letter to United chief executive Glenn Tilton." (Denver Post)

Text of PBGC Letter to United Air Lines Chairman (PDF)
1 page. Excerpt: "The company has characterized certain covenants in its amended [debtor in possession bankruptcy] filing agreement as 'effectively' prohibiting further pension contributions prior to exit from bankruptcy. Any such covenants would be inconsistent with ERISA and the Internal Revenue Code and contrary to public policy." (Pension Benefit Guaranty Corporation)

New York Times Coverage: U.S. Wants Details on United's Pensions
Excerpt: "The Pension Benefit Guaranty Corporation took the unusual step of setting a deadline and making it public because of the extraordinary size of the pension funds at stake.... The pension agency has calculated that it would be liable for about $5 billion of that should United default on all four of the plans. Certain airline employees would bear the rest of the losses as reductions in their benefits." (New York Times; one-time registration required)

Fiduciary Process Best Practices at United Trust Company, N.A. (PDF)
54 pages. Excerpt: "The purpose of the Unified Trust fiduciary process best practices compendium is to give an overview of the prudent process followed by our Trust Investment Committee for both employee benefit and personal trust clients. Our ultimate goal is to improve investment outcomes for our clients and increase their financial goal success probability." (Unified Trust Company)

What Are Advantages and Disadvantages of Offering a Non-Elective Contribution?
Excerpt: "Offering your employees a retirement plan that includes non-elective contributions definitely has its pros and cons. Here are some of the major issues on both sides." (Financial Finesse via Workindex.com)

Speakers at ALI-ABA Conference Focus on Cash Balance Plans, Contingent Workers
Excerpt: "According to Bruce Temkin, of Temkin Phillips and Associates, there has been an 'explosion' in the creation of defined benefit plans in the small business arena. In addition, according to Temkin, approximately 50% of large law firms have adopted supplemental defined benefit plans and that trend is filtering down to smaller firms." (CCH News & Information Library)

An Introduction to Corporate Governance for Private ESOP Companies
Excerpt: "For a non-public corporation that is partly or entirely owned by an employee stock ownership plan and trust (ESOP), principles of Corporate Governance are as paramount as in the public sector. This article teaches ESOP companies and their ESOP participants about the relationships between the board, the officers and shareholders in the corporate governance structure." (Chang, Rutherford & Long PC)

Microsoft Gives Public Pension Funds Boost
Excerpt: "Like all Microsoft Corp. stockholders, public employee pension funds will see a healthy infusion of cash just before Christmas thanks to the software giant's dividend of $3 a share." (AP via New York Times; one-time registration required)

IRS Gives Retirement Plan Practitioners Some Nicely "RAP'd" Presents
Excerpt: "[T]he earliest deadline to submit a new plan or a new amendment for a favorable determination letter for an individually designed plan is now December 31, 2005." (Chang, Ruthenberg & Long PC)

Links to Items on Executive Comp, Benefits in General

Text of IRS Priority Guidance Plan for 2004-2005, Including Planned Benefits Regs and Rulings (PDF)
24 pages; listed projects include retiree health accounts in a profit sharing plan; coordination with Puerto Rico law for qualified plans; the default rollover of involuntary distributions; the staggered remedial amendment period; post severance elective deferrals; valuation of life insurance distributed from qualified plans; IRA abuses; more. (Internal Revenue Service)

The Nature of a Public Agency's Employee Benefits Commitment to Its Employees
Excerpt: "Governmental employers are now being forced to look at every available means, including the reduction of employer-paid benefits, as a way to 'stop the bleeding.' This article addresses several important legal issues that arise when a California public agency attempts to reduce the level of benefits that it provides to its employees." (Chang Ruthenberg & Long PC)

Bookmark: IRS Web Page on Abusive Employee Plans Transactions
Excerpt: "The IRS is engaged in extensive efforts to curb abusive tax shelter schemes and transactions. The Tax Exempt and Governmental Entities Division of the IRS, including the office of Employee Plans, participates in this IRS-wide effort by devoting substantial resources to the identification, analysis, and examination of abusive tax shelter schemes and promotions." (Internal Revenue Service)

Update on Close of FASB's Public Comment Period (PDF)
2 pages. Excerpt: "Since it appears likely that option expensing will be adopted and the final standard will be similar to the [exposure draft] issued on March 31, 2004, it is important for employers to develop a prospective strategy. The following are measures that employers should consider in anticipation of the final adoption of the standard: ..." (Frederic W. Cook & Co., Inc.)

Newly Posted Events

2004 Health Policy Orientation Program
in District of Columbia on October 25, 2004
presented by AcademyHealth

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

Introduction to ESOPs Seminar
in Hawaii on August 19, 2004
presented by National Center for Employee Ownership

Medicare Media Briefing
Nationwide on July 26, 2007
presented by Kaiser Family Foundation
Newly Posted Press Releases

CMS Proposed Regulations Will Encourage Employers to Continue Retiree Health Coverage
(American Benefits Council)

Treasury and IRS Issue 2004-2005 Priority Guidance Plan
(U.S. Department of Treasury)

HHS Proposes New Rules to Deliver Better Benefits and Savings on Drugs for Medicare Beneficiaries
(U.S. Department of Health & Human Services)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Plan Administrator
for Benefit Associates, Inc.
in CA

Client Relationship Manager
for PensionTrend, Inc.
in MI

HR Benefits Specialist Senior
for Allina Hospitals and Clinics
in MN

Retirement Plan Consultant
for Invesmart, Inc.
in OH

Actuarial Assistant
for McCready and Keene, Inc.
in IN

Health Benefits Project Manager
for Hewitt Associates
in TX

Participant Education Consultant
for The Vanguard Group
in PA

Third Party Administrator
for Redwood Administrators, Inc.
in NJ

Consulting Pension Actuary
for Alliance Benefit Group of Illinois, Inc.
in IL

401(k) Compliance Specialist
for Steele Retirement Plan Services, Inc.
in IA

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

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