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August 10, 2004
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
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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)
Rev. Proc. 2004-56: Text of Model Amendments for Eligible 457(b) Plans of Governmental Employers (PDF)
Excerpt: "EGTRRA made changes to eligible § 457(b) governmental plans, including increases in elective deferral limits, repeal of the rules coordinating the § 457 plan limits with contributions to certain other types of plans, catch-up contributions ..., extension of qualified domestic relation order rules to § 457 plans, rollovers to and from various types of ... plans, § 403(b) contracts and [IRAs], and transfers to purchase permissive service credits under governmental defined benefit plans." (Internal Revenue Service)
GAO Says Mutual Fund Changes Could Hurt Investors
Excerpt: "Securities regulators must modify their proposals to combat abusive market timing and late trading in mutual funds, or risk hurting retirement-fund investors, a congressional report said yesterday." (Bloomberg News via Baltimore Sun; one-time registration required)
GAO Agrees: SEC Should Modify Proposed Regulations to Address Some Pension Plan Concerns
43 pages. Excerpt: "GAO recommends that the SEC Commissioners adopt modifications or alternatives to the proposed regulations that would prevent pension plan participants from being more adversely affected than other investors. In its response to GAO's draft report, SEC agreed with GAO's analysis and noted that it is considering modifications to the proposed regulations." (U.S. General Accounting Office)
401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2003 (PDF)
24 pages. Excerpt from executive summary: 'The average account balance among participants who consistently held accounts since 1999 increased 29.1 percent in 2003 and 17.1 percent altogether since 1999. While average account balances increased in 2003 across all participant age and tenure groups, balances for some older participants had not yet recovered from the impact of the three-year bear market in equities.' Executive summary is at http://www.ebri.org/ibex/ib272.htm (Employee Benefit Research Institute (EBRI))
401(k) Balances for Older Workers Below 1999 Levels
Excerpt: "Despite strong investment gains enjoyed last year, older employees' 401(k) account balances, on average, still are less than they were four years ago, a reflection of the battering that account balances took during the bear equities market, according to a new analysis." (Business Insurance)
Most 401(k) Savers Survived Bear Market, Study Says
Excerpt: "Most Americans who invest in 401(k) retirement savings accounts weathered the 2000-2002 bear market downturn pretty well, according to a research report issued Monday." (AP via Washington Post; one-time registration required)
Delta Pilots Retiring Early In Greater Numbers
Excerpt: "As the specter of bankruptcy continues to loom for Delta Air Lines Inc., its pilots are retiring early at a higher rate than ever, according to the airline's quarterly filing with the Securities and Exchange Commission. Delta pilots who retire can currently choose to receive 50 percent of their pension benefit in a lump sum in connection with their retirement and the remaining 50 percent as an annuity after retirement." (Atlanta Business Chronicle via MLive.com)
Pilots at United Promise to Fight Pension Change
Excerpt: "Yesterday, the Air Line Pilots Association, which represents the airline's 8,800 pilots, warned that terminating pension plans 'has the potential to destroy the career of every pilot, and potentially plunge labor relations at United into years of hostility and chaos.'" (New York Times; one-time registration required)
Opinion: Dump the UAL Scoundrels
Excerpt: "A potential catastrophe is bearing down on airline workers and their unions, initiated by United Air Lines, the world's second-biggest airline. The issue at stake is billions of dollars that UAL workers have accrued in pension accounts." (Workers World)
Opinion: Pensions On Shaky Edge
Excerpt: "Congress ought to consider increasing PBGC premiums paid by employers, even though higher costs could tempt more employers to drop out of the insurance pool. Other changes would be more clearly beneficial, starting with eliminating a prohibition against pumping additional money into corporate plans during good times." (Los Angeles Times; one-time registration required)
District Court Finds No Right of Contribution Among ERISA Fiduciaries (PDF)
At p. 4 of 8-page document. Excerpt: "The District Court for the Western District of Tennessee has held, in the case of May v. National Bank of Commerce, that an ERISA fiduciary charged with violating his fiduciary duties cannot sue his co-fiduciaries for contribution." (Jenkens & Gilchrist)
Rollover of ESOP Distributions to IRAs-- Recent Developments (PDF)
At p. 5 of 8-page document. Excerpt: "The IRS has favorably addressed whether the following types of distributions may be rolled over from ESOPs into IRAs: (a) distributions of S corporation stock, and (b) distributions of rights in escrowed proceeds of ESOP stock sales." (Jenkens & Gilchrist)
ESOP Legislative Update (PDF)
At pp. 3-4 of 8-page document. (Jenkens & Gilchrist)
Pennsylvania School Retirees Return To Rewards
Excerpt: "[R]etired Pennsylvania school administrators are ... taking advantage of a change in the state law allowing them to work up to a full school year for the public school system while also collecting their state pension. School officials are applauding the change, but it has left one state Assembly leader cringing." (PhillyBurbs.com)
County Employees' Union OKs Pension-Boosting Pact Despite Cost-Sharing Requirement
Excerpt: "Orange [County California's] largest union of government workers has voted overwhelmingly to support a contract that substantially boosts pensions but that also requires workers to forgo raises and make out-of-pocket payments to cover the increased retirement pay." (Los Angeles Times; one-time registration required)
Golden Years or Fool's Gold?
Excerpt: "Experts and workers disagree strongly about whether the next generation of American retirees will have adequate income to live comfortably. The difference in perception is extraordinarily broad." (Baltimore Sun; one-time registration required)
Welcome to new BenefitsLink advertiser LTSave, Inc.
Excerpt: "LTSave, Inc. provides investment advice to employees accumulating retirement assets through their employer-provided 401k, 403b, or 457 defined contribution plans. LTSave's service is provided to them through their employers. Employees are provided advice through an easy to use web-site, call-center, and educational meetings. LTSave is an independent advisor, and provides advice as a fiduciary in the best interest of the employee. LTSave is a SEC-registered investment adviser."
Links to Items on Executive Comp, Benefits in General
Rabbi Trusts – the Basics and Beyond
Excerpt: "While rabbi trusts have been around for over 20 years, they only recently have generated significant interest outside the employee benefits and executive compensation community. In this article, we review the basics of rabbi trusts, address some of the unique issues that can arise in connection with their use, and explain the heightened interest in rabbi trusts on Capitol Hill and elsewhere." (Groom Law Group)
Global Aging: Issues, Answers, More Questions (PDF)
55 pages; working paper. Excerpt: "Global aging will be a major determinant of long run economic development in industrial and developing countries.... The purpose of this paper is to review the most important economic chances and challenges due to global aging. It summarizes what we know and identifies research areas where it is important to know more." (Axel Börsch-Supan published by the University of Michigan Retirement Research Center)
Hewlett Packard Lawsuit Is Reminder to Review Contracts on Employee Benefits and Worker Arrangements (PDF)
2 pages. Excerpt: "A class action lawsuit recently filed against the Hewlett Packard Co. is a reminder that litigation alleging misclassification of employees is alive and well." (Journal of Pension Benefits via Kilpatrick Stockton LLP)
Outsourcing: Traps for the Unwary
Excerpt: "[I]t is important to remember the possible exposure to liability that can occur as employers consider the option of outsourcing in its many forms. While time will not permit going into all of the legal exposure that can arise, two such areas of vulnerability that come to mind are ..." (Attorney B. Janell Grenier on BenefitsBlog.com)
Newly Posted Press Releases
Revision to Notice 2004-50
(Internal Revenue Service (IRS))
IRS Initiative Will Scrutinize EO Compensation Practices
(Internal Revenue Service (IRS))
Buoyed by Equity Market Performance and Ongoing Contributions, Average 401(k) Account Balances Grew in 2003
(Employee Benefit Research Institute (EBRI))
ERIC Calls on Congress to Allow 401(k) Participation for Workers Called to Active Military Duty
(ERIC (ERISA Industry Committee))
SecurAssist® Launches Dynamic Website - Focuses on Helping Clients Respond to Security Threats
(Assist America, Inc.)
American Express Retirement Services’ 2004 Client Forum Features Prominent Benefits And Policy Leaders: Event Invites Benefits Professionals To “Break Through” To New Possibilities In The Changing World Of Benefits And The Growing Demands Of Their Workforce.
(American Express Retirement Services)
Information Casts Doubts on UC Berkeley Labor Center's Study on Wal-Mart
(Wal-Mart Stores, Inc.)
Newly Posted or Renewed Job Openings
Tax Manager-Employee Benefits Tax Services
for Deloitte-Cleveland
in OH
Marketing Associate, Request For Proposals
for CitiStreet
in NJ
401(k) Compliance Specialist
for TPA Firm in Southeastern MI
in MI
401(k) Service & Sales Associate
for A Financial Services Company- A Metrowest Family Business
in MA
Daily Valuation Plan Administrator
for ALCOS
in MI
Sales Director-Major Markets
for Wachovia Bank
in NC
ERISA Attorney/ Consultant
for Towers Perrin
in NY
Sales Representative
for MBM Advisors Inc. in Houston, TX
in GA
Employee Benefits Specialist/Benefits Consultant
for Davis Graham & Stubbs LLP
in CO
Defined Contribution Administrative Assistant
for BFP Associates
in MA
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