| BenefitsLink Retirement Plans Newsletter |   |
September 29, 2004
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
Software for 401(k), DB and Flexible Benefits DATAIR BENEFIT ADMINISTRATION SOFTWARE for Pension, Profit Sharing, 401(k) and Cafeteria/Flexible Benefits plans. Designed for administrators and consultants. Modules include proposals, IRS-approved documents, enrollment, administration, government reporting, distribution, tax planning, and client and task management. Training and support included. For free demo versions and pricing, contact sales@datair.com or call 1-888-DATAIR4 (328-2474).
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Text of IRS Announcement 2004-80: Clarification of 2003 Form 5500 Schedule B Line 8c (PDF)
2 pages. Excerpt: "Because many plan sponsors have had difficulty reporting the data required by line 8c of the 2003 Schedule B, this announcement is intended to provide flexible options to comply with existing reporting requirements. This announcement merely replaces certain instructions in order to clarify and simplify the method for reporting data." (Internal Revenue Service)
Overview of DOL's Proposed Amendment to Prohibited Transaction Exemption 84-24 (PDF)
2 pages. Excerpt: "On September 14, 2004, the DOL proposed an amendment to PTE 84-24 (69 Fed. Reg. 55463 (Sept. 14, 2004)). Among other conditions, PTE 84-24 requires that the insurance agent or broker, pension consultant, insurance company, or investment company principal underwriter (or any affiliate of any such entity) involved in the transaction not be a trustee of the plan, other than a nondiscretionary trustee who does not render investment advice with respect to any assets of the plan." (Sutherland Asbill & Brennan LLP)
ERISA Fiduciary and Company Stock Bulletin Article on Case of Company Stock in 401(k) Plan (PDF)
2 pages. Excerpt: "In re: ADC Telecomm., Inc. ERISA Litigation (D. Minn July 26, 2004). In this case, participants invested in the ADC Telecommunications 401(k) plan's stock fund, which consisted of mostly ADC common stock, brought an action against defendants ADC, the ADC Board of Directors, the Retirement Savings Plan Committee and various individual employees that are alleged to be fiduciaries of the plan." (Jenner & Block)
ERISA Fiduciary and Company Stock Bulletin Article on Case about Fiduciary Duties (PDF)
2 pages. Excerpt: "In re AEP ERISA Litigation (S.D. Ohio Aug. 10, 2004). In this case, the Plaintiffs ... brought suit on behalf of the participants in the American Electric Power System Retirement Savings Plan ... whose individual accounts the Plan purchased and/or held shares of the AEP Stock Fund from December 9, 1998 to present. The Plaintiffs alleged the Defendants ... breached their fiduciary duties as set forth in ERISA and the Department of Labor Regulations." (Jenner & Block)
Case Summary: Fiduciary Duties and an ESOP (PDF)
2 pages. Excerpt: "Armstrong v. Amsted Industries, Inc., No. 01 C 2963 (N.D. Ill. July 30, 2004). In this case, the claims of the Plaintiff class (participants in the Amsted Industries Employee Stock Ownership Plan) that Defendants (Amsted, the ESOP, the ESOP Committee members and LaSalle Bank as the ESOP trustee) breached various duties under ERISA with respect to the ESOP were dismissed as the Defendants' motions for summary judgment were granted." (Jenner & Block)
Retailer Kmart Boosts 401(k) Plans; Will Match Contributions Dollar-for-Dollar Up to 3 Percent
Excerpt: "Kmart Holding Corp., buoyed by profits and its climbing stock, will increase employee retirement benefits next year, a move that could boost the morale of workers who lost part or all of their nest eggs when the former Kmart spiraled into Chapter 11 bankrup.tcy." (The Detroit News)
SEC Turns Up the Heat on 401(k) Fiduciaries
Excerpt: "This is not an easy time to be a 401(k) plan fiduciary. With frightening regularity, attacks have been launched by government agencies and plan participants, some successfully, at fiduciaries. And never has the group of potential plan fiduciaries been so large." (Littler Mendelson via FindLaw)
Harvard Study Looks at Psychology of Saving for Retirement
Excerpt: "The psychology behind saving for retirement is a mix of procrastination and good intentions, experts say, and now Harvard economists say they've learned how to push procrastination aside. In a study, they found that the number of employees contributing to a 401(k) doubled when a deadline was set for making a decision." (Newsday via Oakland Tribune)
Watson Wyatt 2004 Survey of Accounting Assumptions for Non-U.S. Defined Benefit Plans
Excerpt: "The 2004 Survey of Accounting Assumptions for Non-U.S. Defined Benefit Plans around the world is the 15th annual survey of assumptions applied by major corporations for their defined benefits plans." (Watson Wyatt Worldwide)
Overview of the July 7, 2004, House Committee Hybrid Pension Plans Hearing
Excerpt: "Hybrid pension plans have been in the spotlight for some time now, receiving ongoing attention from lawmakers, regulators and the media. One of the most focused public discussions of cash balance issues was on July 7, 2004, when the House Education and the Workforce Committee held the hearing 'Examining Cash Balance Plans: Separating Myth from Fact.' It was the first hearing in several years to focus exclusively on hybrid plans." (Watson Wyatt Worldwide)
Case Summary: Trust Company Has Duty to Distinguish between Proper and Improper Instructions (PDF)
2 pages. Excerpt: "Kling v. Fidelity Management Trust Co. et. al. This district court case, Kling v. Fidelity Management Trust Co. et. al., 2004 U.S. Dist. LEXIS 12634 (D. Mass. 2004) (decided June 23, 2004), provides helpful insight into the treatment of issues regarding statutes of limitations, breaches of fiduciary and co-fiduciary duties, respondeat superior liability, and directed trustee duties under ERISA." (Jenner & Block)
Overview: Changing 401(k) Defaults on Cashing Out: Another Step in the Right Direction (PDF)
4 pages. Excerpt: "Now, under the new law, the employer must roll over any 401(k) plan with a value between $1,000 and $5,000 into an IRA – unless the separating worker elects to have it cashed out or rolled over into a new 401(k) at his new company. 5 In other words, the default is shifted from cashing out to rolling over." (Center for Retirement Research at Boston College)
IRS Releases 2004–2005 Guidance Priority List; No Cash Balance Guidance Projects on List
Excerpt: "The 2004-2005 Guidance Priority List is out, reflecting the IRS's regulatory intentions for the next year. After a couple of years with wide fluctuations in the number of projects -- namely a dramatic decrease in 2002 followed by an increase in 200 3-- this year's list contains the same number of projects as last year's: 47. The agency may yet release additional guidance." (Watson Wyatt Worldwide)
Is Defined Benefit Pension Plan Insurance the Next S&L Crisis?
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures private-sector defined-benefit pension plans in the event of bankrup.tcy, is in bad shape financially and rapidly getting worse. From 2000 to 2003, the agency went from a surplus of $9.7 billion to a deficit of $11.2 billion." (Richard A. Ippolito for the Cato Institute)
Schwab Self-Directed Brokerage Account Indicators: a Source of Information on Participant Behaviors
Excerpt: "Schwab's Self-Directed Brokerage Account Indicator reports profile the investment behavior in 60,000 401(k) plans directing trades through the company's self-directed brokerage accounts. The indicators provide information on the investing activities, behaviors and sentiments of participants investing in self-directed brokerage accounts within their retirement plan." (Schwab Retirement Plan Services)
Investment Company Institute Releases Results of Ad Hoc Survey on SIMPLE IRAs as of June 30, 2004
Excerpt: "The Institute recently surveyed certain of its members in a continuing effort to track developments in the SIMPLE IRA market. (An earlier survey covered the first six months of 2003.) The Institute's survey requested SIMPLE IRA data on the number of plans, number of plan participants, and value of the assets as of December 31, 2003 and June 30, 2004." (Investment Company Institute)
Links to Items on Executive Comp, Benefits in General
Social Security, Medicare, Pensions on Debate Issues Checklist: How Do We Pay for It All?
Excerpt: "Print out this checklist right now. And keep it handy during the presidential debates. See if we get answers. So far, neither President George Bush nor Sen. John Kerry has the guts to get honest about this one central issue that ties together all other issues ... How the hell are we going to pay for everything?" (Investor's Business Daily; one-time registration required)
Perspective: 2005 U.S. Compensation Planning Requires Consideration of More Than Cost
Excerpt: "Determining pay strategies is a juggling act – one that requires the consideration of three important forces: the employer, the employee, and cost. Each struggles for the attention of HR, and all should be considered with equal weight and importance." (Mercer Human Resource Consulting)
US Airways and Delta Cuts Target Executives: Will Reduce Management Payroll and Some Benefits
Excerpt: "US Airways Group Inc. intends to slash its executive payroll by 20 percent, reducing the pay and benefits for its 3,000 managers and eliminating some positions, sources familiar with the plan said yesterday. [Delta] also plans to eliminate its subsidy for retiree and survivor health care coverage at age 65 and older, effective for those employees retiring after Jan. 1, 2006." (The Washington Post; one-time registration required)
Good-Bye to the Golden Age of Stock Options -- in 2005 or Later
Excerpt: "Rules from the Financial Accounting Standards Board won't take effect until 2005 or later. But many companies are already refashioning their incentive plans, curbing the amounts of their option grants, limiting who is eligible, or both." (Workforce Management; one-time registration required)
A 'Tsunami' Named 'Employee Benefits' Heaves Toward U.S. Shores
Excerpt: "Using sand-bags to defend corporations against a tidal wave of rising benefits expenses is unlikely to do much good. More drastic measures are necessary, experts say, and employees look as if they most likely will have to bear the burden." (Risk and Insurance)
Humor: P.J. O'Rourke as the first speaker of the 2004-2005 Drue Heinz Lecture Series Shares Opinions
Excerpt: "O'Rourke's libertarian leanings shaded many of his remarks, including an attack on federal entitlements like Medicare and Social Security. According to O'Rourke, both Democratic and Republican health-care reform plans are deeply flawed, and neither party has addressed the burden of Social Security on younger generations." (The Pitt News)
Perspective: IASB's IFRS 2 and FASB Exposure Draft on Expensing of Share-Based Payments
Excerpt: "All signals indicate that mandatory expensing of share-based payments, including stock options, performance shares, and stock appreciation rights, may become a global standard for companies in 2005." (Mercer Human Resource Consulting)
Newly Posted Events
401(k) Plans
in Oregon on October 5, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
Cafeteria Plans
in Oregon on October 6, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
COBRA Compliance for Group Health Plans
in Oregon on October 8, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
Consumer-Driven Health Care & Fringe Benefits
in Oregon on October 7, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
ERISA Compliance for Health & Welfare Plans
in Oregon on October 7, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
HIPAA Portability & Privacy
in Oregon on October 8, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
The HIPAA Security Risk Analysis: It's Good Business ... and It's Required
Nationwide on October 12, 2004
presented by Atlantic Information Services, Inc
Newly Posted Press Releases
PBGC Will Meet With Participants in Piccadilly Cafeterias Inc. Pension Plan
(Pension Benefit Guaranty Corporation (PBGC))
New Tax-Advantaged Health Accounts: Options Abound, But Impact Still Unknown
(Employee Benefit Research Institute (EBRI))
Tax-Deferred IRA Contributions Jump 30% in 2002; Total 2003 Assets Hit Record $3 Trillion Level
(Employee Benefit Research Institute (EBRI))
Health Insurance Coverage Dropped for Workers at Large Firms in 1987-2002 Period
(Employee Benefit Research Institute (EBRI))
Labor Department Releases Form 5500 Annual Report And Filing Requirements
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Coalition for Tax Fairness Launched to Help Incentive Stock Option Victims of Alternative Minimum Tax
(Coalition for Tax Fairness)
Newly Posted or Renewed Job Openings
Defined Benefits/Pension Plan Implementation MGR
for Mellon HR & Investor Solutions
in NJ
Health Insurance & Group Insurance Sales Executive
for Alliance Benefit Group of Kansas City, Inc.
in IA, KS, MN, MO
Senior Pension Systems Analyst
for CitiStreet
in FL
Technician, Settlement Operations
for Transamerica
in CA
Defined Benefits Project Leader
for The Vanguard Group
in PA
Associate Director Compliance
for Telecommunications Company
in TX
Associate Director-Data
for Telecommunications Company
in TX
Plan Administrator / Client Account Manager
for Northwest Plan Services, Inc.
in WA
Employee Benefits Counsel
for Established, Highly Regarded Company in Northern Florida
in FL
Investment Advisory/Retirement Sales Consultant – St. Louis
for Invesmart, Inc.
in MO
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