| BenefitsLink Retirement Plans Newsletter |   |
August 30, 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)
Continental Airlines Says Pension Is Safe: United Threat Scares Others in Industry
Excerpt: "The shock of United Airlines' threat to terminate its pension plan has become a worrisome point of discussion in Continental Airlines' talks with pilots." (Houston Chronicle via The Mercury News)
Corporate Failures Hurt PBGC
Excerpt: "A flurry of corporate bankruptcies in the past few years leaves a public agency strapped for cash: the Pension Benefit Guaranty Corporation. Weakness at United Airlines is an imminent threat. Hear NPR's Jennifer Ludden and Bradley Belt, executive director of the PBGC." (National Public Radio)
Pension Insurer's Finances Wobbly; Precarious Status of Airlines a Threat
Excerpt: "It's white-knuckle time for airline shareholders, workers and creditors as major carriers fight to pull out of their financial tailspin. And taxpayers should be worried, too." (The Atlanta Journal-Constitution; one-time registration required)
US Airways Pilots Make a New Offer
Excerpt: "Airways Group Inc.'s pilots union leaders say they have offered an alternative contract to the carrier after declining to let members vote on a company proposal for $295 million in pay and benefit cuts." (New York Post; one-time registration required)
Analysis: IRS Issues Final 401(a)(9) Minimum Distribution Regulations (PDF)
At pp. 1-3 of 6-page document. Excerpt: "Treasury Regulations section 1.401(a)(9)–6 provides guidance on the minimum distribution requirements for defined benefit plans, for annuity contracts purchased with account balances under defined contribution and individual retirement plans, and for annuity contracts which provide benefits under 403(b) arrangements." (Trucker Huss)
Employee Ownership Update for August 27, 2004
NCEO Executive Director Corey Rosen discusses how ESOP activity is presently strong in private companies but not public companies; the percentage of companies with broad-based equity plans dropped in 2004; pre-IPO companies still favor broad employee ownership; and the FASB has changed its approach to vesting issues when accounting for stock options. (National Center for Employee Ownership)
Profitable Prudence: the Case for Public Employer Defined Benefit Plans (PDF)
26 pages; working Paper. Gary Anderson and Keith Brainard. Excerpt: "This chapter describes the divergence between pensions in private industry, where the focus has shifted sharply toward defined contribution plans, and in the public sector, where defined benefit plans continue to dominate." (Pension Research Council)
Flexible and Partial Retirement for Norweigian and Swedish Workers
Newly available online; originally published in 1985. Excerpt: "With a commitment to full employment, both countries encourage older workers to ease the transition from work to retirement; in Sweden, employees can begin at age 60, while in Norway, workers qualify after reaching the normal retirement age of 67." (U.S. Department of Labor, Bureau of Labor Statistics)
Changes in Accounting Practices Will Drive Pension Paradigm Shift (PDF)
26 pages; working Paper. Douglas Fore. Excerpt: "This chapter examines recent and anticipated changes in worldwide accounting practices, and our focus is on the issue of whether pension accounting standards are consistent with the economics of pension finance." (Pension Research Council)
Looking Backward, Looking Forward: Where is Pension Policy Headed? (PDF)
19 pages; working Paper. James A. Klein. Excerpt: "Since the passage of the Employee Retirement Income Security Act of 1974, public policy has continuously shaped the trajectory of the US retirement system. It is clear that the policy process will continue to be key in the future reinvention of the retirement paradigm." (Pension Research Council)
Educating Pension Plan Participants (PDF)
16 pages; working Paper. William J. Arnone. Excerpt: "Educational programs are often used by large employers to help employees make informed decisions in connection with their retirement programs. This chapter evaluates the range of programs offered, their scope, and objectives. We also explore the evidence that these programs increase the efficacy of retirement savings." (Pension Research Council)
Separately Managed Investment Accounts on the Rise
Excerpt: "Baby boomers and job hoppers are fueling the growth in the IRA rollover market, and a chunk of that coveted money is expected to land in separately managed accounts." (AP via The New York Times; one-time registration required)
Opinion: The Circle of Life of Pension Plans
Excerpt: "Defined benefit pension plans are crippling several subsets of the American community because they amount to promises that are impossible to keep." (The Contra Costa Times; one-time registration required)
Reality Testing for Pension Reform (PDF)
46 pages; working Paper. Pamela Perun and C. Eugene Steuerle. Excerpt: "Analyses of the U.S. private pension system typically focus on such issues as how to improve coverage or encourage saving or prevent tax abuse or generate retirement income more equitably. Those issues are important, but this chapter takes the position that reinventing the retirement paradigm will require more fundamental analysis." (Pension Research Council)
The Parable of the Slothful Servant: a Moral Case for Privatizing Social Security
Excerpt: "For most people, the purchase of a home is considered the biggest single purchase they will ever make, so the subject is naturally approached with caution. ….However, most Americans make a purchase that can be larger than their home: their retirement plan. Over a working life of, say, 40 years, most Americans will pay out tens of thousands of dollars in Social Security contributions." (Exegesis)
Links to Items on Executive Comp, Benefits in General
Employee Issues Best Addressed Early In M&A Process
Excerpt: "The changing economy has led to an influx in merger and acquisition activity. Often overlooked in such transactions are critical legal and practical issues relating to the employees being acquired." (Columbus Business First via bizjournals; one-time registration required)
How to Outsource All of Your Firm's Employee Benefits
Excerpt: "Business owners can save time and frustration by outsourcing the management of the benefits they offer." (Orlando Business Journal)
Bush to Push for 'Ownership Society' Approach to Healthcare, Retirement Savings
Excerpt: "In New York, the President will take the wraps off a second-term domestic agenda built around the idea of an 'Ownership Society' in which Americans would be empowered to save and invest more, playing a larger role in managing their own health care and retirement finances." (BusinessWeek)
Uneven Start for New Overtime Rules
Excerpt: "New federal overtime rules have generated some controversy – but they won't take effect in all states at the same time." (PLANSPONSOR.com; one-time registration required)
Medical and Retirement Plan Coverage: Exploring the Decline in Recent Years
Excerpt: "The percent of workers with employer-provided medical care and retirement benefits plans declined over the past decade; a variety of potential explanations are explored." (U.S. Department of Labor, Bureau of Labor Statistics)
New Benefits Data from the 2003 National Compensation Survey
Excerpt: "Private establishments with 100 or more workers were much more likely than small establishments to offer medical insurance and retirement benefits in 2003; this information comes from new National Compensation Survey data on employee benefit plan coverage and plan details." (U.S. Department of Labor, Bureau of Labor Statistics)
The 2003 National Compensation Survey: a Wealth of Benefits Data
Excerpt: "The BLS National Compensation Survey provides an array of benefits data; in 2003, for the first time, information is available on the percentages of establishments offering health insurance and retirement plans, and the percentage of medical premiums paid by employers and employees." (U.S. Department of Labor, Bureau of Labor Statistics)
Incidence Benefits Measures in the 2003 National Compensation Survey
Excerpt: "For the first time, data from the National Compensation Survey allow comparisons between establishments offering health and retirement benefits and the rates at which employees have access to and participate in those benefits." (U.S. Department of Labor, Bureau of Labor Statistics)
Warning Anew About Retiree Expectations
Excerpt: "The chairman of the Federal Reserve Board, Alan Greenspan, warned on Friday that the federal government might have to scale back promises to the elderly in programs like Social Security and Medicare." (The New York Times; one-time registration required)
FASB Modifies Option Expensing Proposal
Excerpt: "A split Financial Accounting Standards Board (FASB) has retreated a bit on its planned stock option expensing plan by deciding to stick with existing rules on accounting for income taxes of option awards." (PLANSPONSOR.com; one-time registration required)
Welcome to new BenefitsLink advertiser ftwilliam.com
Excerpt: "www.ftwilliam.com offers the employee benefits professional the highest quality plan documents and forms at highly competitive prices. Plan documents on a per document basis are only $50/adoption agreement, or $100/volume submitter document. An annual subscription to all documents is only $1,500. The Form 5500 package (including schedules) and the IRS/PBGC form package are only $250 each. )."
Newly Posted Events
2004-2005 Membership Meeting
in Ohio on October 21, 2004
presented by Employee Benefits Council of Northeast Ohio
Consumer-Driven Health Plans: Potential, Pitfalls, and Policy Issues
Nationwide on September 10, 2004
presented by AcademyHealth
New Medicare Prescription Drug Rules: Critical Issues for Retiree Health Plan Sponsors
Nationwide on September 8, 2004
presented by Mercer Human Resource Consulting
U. S. Labor Department Sponsors Seminars To Help Plan Professionals Comply With Federal Pension Law
in Pennsylvania on September 20, 2004
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Newly Posted Press Releases
TREA Offers ARAG's Prescribed Legal Solution to Its Members
(ARAG Legal Insurance Company)
Putnam Investments Joins CPI Platinum Partner Retirement Plan Platform
(CPI Qualified Plan Consultants, Inc.)
A Professionally Managed ETF Solution Hits the Retirement Plan Marketplace
(The Institute for Wealth Management)
Pixion PictureTalk Sponsors Free Webinar: “The 401(k) Owner’s Manual: The Best Websites for Your Retirement”
(Financial Interactions LLC)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Renee W. O'Rourke (Faegre & Benson LLP)
Brenda R. Berg (Faegre & Benson LLP)
Newly Posted or Renewed Job Openings
DC Administrator
for Lorraine Dorsa & Associates
in FL
Manager, Partner Relationships
for PAi
in WI
Human Resource Legal Consultant
for Hewitt Associates
in IL
Director of Internal Sales
for The Newport Group
in NC
Compliance Specialist
for New Directions Management Services, Inc.
in TN
Director, Communications and Product Development
for BISYS Retirement Services
in PA
Defined Contribution/401(k) Administrator
for Professional Capital Services, LLC
in PA
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