| BenefitsLink Retirement Plans Newsletter |   |
September 2, 2004
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City of Houston Decides to Reduce Pension Benefits
Excerpt: "The deal ... requires workers to contribute 5 percent rather than 4 percent of their paychecks to the pension plan." (Houston Chronicle)
Fidelity Slashes Fees on Index Funds
Excerpt: " Leaping into a burgeoning price war with low-cost exchange traded funds, Fidelity Investments has slashed fees on five index mutual funds widely used in group and individual retirement accounts." (AP via Washington Post; one-time registration required)
2004 Retirement Income Replacement Ratio Study (PDF)
32 pages. Excerpt: "Since 1988, the Aon Consulting/Georgia State University study on benchmarking retirement income needs has been a premier source of information for retirement planning. … this booklet presents the results of our 2004 analysis, the sixth update to the study. In this most recent iteration, we recognize changes that are occurring in the retirement income delivery system in the United States." (Aon Consulting/Georgia State University)
United Studying Big Job Cuts; Savings Goal Put at $655 Million
Excerpt: "A deep round of job cuts at United Airlines is needed to help shave another $655 million in annual costs so the carrier can attract financing to exit bankrup.tcy, sources said Wednesday." (Chicago Tribune; one-time registration required)
Pilots Resist Pay Cuts at US Airways
Excerpt: "Airline executives say they must cut costs to avoid another fall into bankrup.tcy -- one that could kill the country's seventh-largest carrier." (www.news14.com)
3 Major Airlines Try to Fly Above Financial Failure
Excerpt: "Three of the nation's largest airlines could be operating under bankrup.tcy protection in coming weeks, analysts say, the latest sign of the industry's upheaval as it lurches through a historic transformation." (The Washington Post; one-time registration required)
US Airways Pilots May Be Near Pay Pact
Excerpt: "US Airways Group Inc.'s pilots union said on Wednesday it may agree this week on a plan to cut wages and benefits to help the seventh-biggest U.S. airline avoid a second bankrup.tcy filing." (Reuters via The New York Times; one-time registration required)
Calculating the Risk of Retirement Woes: Using a New Calculator from the Society of Actuaries
Excerpt: "Most free, online retirement calculators let you test the durability of your nest egg using basic factors, such as age, life-expectancy, monthly income expectations and the size of your savings. But the Retirement Probability Analyzer takes it a few steps further, by also accounting for pension assets, expected investment returns, and the effects of an immediate annuity investment." (Wall Street Journal via Society of Actuaries)
Court: Account Offset Not Mentioned in SPD Cannot Reduce Retirement Benefit
Excerpt: " If a 'phantom account' set up for a prior lump-sum distribution is not mentioned in the summary plan description (SPD), it cannot be used to offset benefits received by an employee that returns to the employer. Granting the plaintiff's motion for summary judgment in part, [the] US District Court for the Western District of New York ruled the Retirement Income Guarantee Plan (RIGP) must recalculate the participant's retirement benefit without using a the 'phantom account' offset." (PLANSPONSOR.com; one-time registration required)
Investor Revolt On Fund Fees Gains Ground
Excerpt: "A lawsuit accusing a mutual fund of charging investors excessive fees has cleared a legal hurdle and could spell a new round of legal woes for fund companies." (Wall Street Journal via SFGate.com)
Overview: Pension Funding Equity Act of 2004: Defined Benefit Plans Get Some Needed Relief (PDF)
2 pages. Excerpt: "Recently enacted federal legislation provides temporary but significant funding relief for qualifying defined benefit pension plans. The new legislation, the Pension Funding Equity Relief Act of 2004 (the 'Act'), was passed by both houses of Congress ... and was signed into law by President George Bush on April 10." (Dow, Lohnes & Albertson, PLLC)
Overview: Automatic IRA Rollover Rules Nearing Completion
Excerpt: "Although the proposed regulations address most of the issues relating to the automatic rollover of 'cash-out' distributions, a number of unanswered questions remain,…." (Employee Benefit News)
Editorial: Congressmen and Social Security. Members Do Participate, But Have Pension Plan Also
Excerpt: "Sen. Harry Reid, D-Nev., took exception to part of our editorial on Social Security that appeared here Tuesday. …, 'Members of Congress do indeed pay into the Social Security system,' a member of the senator's staff noted this week." (Las Vegas Review-Journal)
Opinion: the Coming Fiscal Civil War Over Medicare and Social Security
Excerpt: "Unless politicians in Washington start cutting government today, Social Security and Medicare will eventually drive the United States into fiscal civil war. It will not be a shooting war, pitting brother against brother. It will be a taxing-and-spending war, pitting grandparents against grandchildren." (Terrence P. Jeffrey in the Washington Times)
Bush Puts Social Security Overhaul Back On Agenda
Excerpt: "As George W. Bush outlines his second-term plans tonight, one theme will be some unfinished business from his convention speech four years ago. Social Security, he said then, is called the third rail of politics, something you can't touch without getting a shock. 'But if you don't touch it,' he added, 'you cannot fix it. And I intend to fix it.' He hasn't yet." (Wall Street Journal via SFGate.com)
Links to Items on Executive Comp, Benefits in General
University of Pittsburgh to Offer Same-Sex Employee Benefits
Excerpt: "The University of Pittsburgh will offer health benefits to domestic partners of g.ay and heterose.xual employees starting in January under a policy change hailed ... as a major breakthrough in an eight-year legal fight.... Pitt employees can sign up for coverage during an enrollment period to be announced this fall and must sign an affidavit of domestic partnership ..." (Pittsburgh Post-Gazette)
Home Depot To Offer Health Care Benefits To Employees' Domestic Partners
Excerpt: "The Home Depot Inc. plans to offer health insurance to same-sex domestic partners of its employees starting next year, the company said Thursday.... The chain has been criticized by some employees and human rights groups for not previously extending health care benefits to domestic partners of employees." (AP via Miami Herald; one-time registration required)
Overview: FASB Decisions on Stock Compensation
Excerpt: "During redeliberations yesterday, September 1, of the Financial Accounting Standards Board (FASB) Exposure Draft (ED) on Share-Based Payment, the board made several more decisions related to the accounting for stock compensation." (Financial Executives International)
Scandal Brings Big Changes to Oil Company Bonuses
Excerpt: "The Royal Dutch/Shell Group of Companies is changing how it rewards employees. Starting in January, staff bonuses will be simplified to take into account individual accomplishments and companywide performance. Success at the division level will no longer be a factor." (Mercer Human Resource Consulting)
Newly Posted Events
Plan Fees, Expenses, and Revenue Sharing
in California on October 21, 2004
presented by Western Pension & Benefits Conference - Orange County Chapter
Tales from the Crypt III - Bringing Benefits from the Footnotes to the Footlights
in Ohio on September 23, 2004
presented by WEB (Worldwide Employee Benefits Network) Cleveland Chapter
Newly Posted Press Releases
As Board Risk and Responsibility Increase, So Does Pay, According to Hewitt Associates
(Hewitt Associates LLC)
Grand Old Profits: Will Republicans Ever Speak Out Against Insurer Profits?
(Foundation for Taxpayer and Consumer Rights)
Newly Posted or Renewed Job Openings
Operations Supervisor
for ICMA Retirement Corporation
in DC
Retirement Plan Specialist
for Diversified Investment Advisors
in CA
Account Executive - Client Relationship Management
for Diversified Investment Advisors
in NY
OmniPlan/OmniPlus Consultant
for DC Specialists, Inc
in ANY STATE
DC Plan Administrator
for Capital Investment Advisory
in FL
Retirement Svcs Major Accounts District Mgr (sales) Upstate NY/CT area
for ADP Retirement Services
in NY
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