| BenefitsLink Retirement Plans Newsletter |   |
October 11, 2004
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Overview: American Jobs Creation Act Tax Bill Changes ESOPs, ISOs, ESPPs, and DC Plans
Excerpt: "On October 6, the House approved a House-Senate conference committee's compromise language on the massive 650-page American Jobs Creation Act tax bill. The bill appears likely to pass the Senate either by mid-October or when Congress returns for a lame-duck post-election session. The bill contains several changes important to S corporation ESOPs and to equity compensation plans." (Corey Rosen via The National Center for Employee Ownership)
American Jobs Creation Act Affects Employee Stock Plans
On October 6, the House approved a House-Senate conference committee's compromise language on the massive 650-page American Jobs Creation Act tax bill. The bill appears likely to pass the Senate either by mid-October or when Congress returns for a lame-duck post-election session. The bill contains several changes important to S corporation ESOPs and to equity compensation plans. (National Center for Employee Ownership)
Overview: Fiduciary Responsibilities & Missing Participants in Terminated Defined Contribution Plans
Excerpt: "In this Field Assistance Bulletin (FAB), the DOL provides guidance regarding the responsibilities of plan fiduciaries in connection with missing participants in terminated defined contribution plans governed by ERISA, including most 401(k) plans.' [Field Assistance Bulletin 2004-02 (Sept. 30, 2004)] For a copy: http://www.dol.gov/ebsa/pdf/fab-2004-2.pdf (Employee Benefits Institute of America)
Financial Brokers Set Sights on Booming 403(b) Market
Excerpt: "A teacher hiring boom is attracting attention from broker-dealers and financial advisers. .... As recently as 2002, teachers could put only $11,000 in a 403(b) plan, but that amount rose to $13,000 this year. It rises to $14,000 next year, before reaching a plateau of $15,000 through 2010." (Investment News; registration or subscription required)
What Is the New Comparability Plan, and How Does It Work?
Excerpt: "A new Comparability Plan is a type of 'Cross-Tested' Plan. The employer contribution is allocated by a formula set out in the plan document. Under a typical new comparability design, plan participants are divided into two or more groups with each group receiving its own level of employer contributions." (McKay Hochman Co., Inc.)
100,000+ Retirement Claims Filed With OPM in 2004 Increases Delay in Annuity Calculations
Excerpt: "Although he retired from the U.S. Postal Service seven months ago, John Griffin of Pittsford, N.Y., is still waiting for the official calculation of his government pension. Since his retirement, Griffin has been receiving an interim pension payment, which provides monthly income but is usually less than what he is due, to protect the government from making overpayments." (The Washington Post; one-time registration required)
Overview: Finalized Rules for Automatic Rollover of Involuntary Cash-Out Amounts of Less Than $5,000
Excerpt: "The DOL final rule contains changes to the six safe harbor requirements that were first itemized in the proposed regulations. In fact, there are now only 5 requirements, which, if satisfied, will permit a qualified plan sponsor to rollover a distributable amount directly to an IRA on behalf of a missing or non-responding participant." (McKay Hochman Co., Inc.)
Overview: What Is the Required Beginning Date for Required Minimum Distributions?
Excerpt: "The answer to this question was actually quite clear before the Small Business Job Protection Act (SBJPA) of 1996 brought about a change. The revised RBD definition complicates plan design and adds complexity to tax planning for individuals when they reach age 70½." (McKay Hochman Co., Inc.)
The Worst Retirement Investment You Can Make –- Variable Annuities?
Excerpt: "High fees, low flexibility and 'horrendous' tax treatment make variable annuities less attractive than ever, except to the people who sell them. By all rights, variable annuities should be dead by now. A series of tax cuts seriously eroded this investment's main advantage of tax-deferred gains. The bear market dealt a body blow, and regulators have filed a series of enforcement actions against annuity sellers for unsuitable sales, lack of disclosure and churning." (MSN Money)
Congress Finds No Simple Solutions to Current Pension Problems
Excerpt: "The grim news coming out of the airline and steel industries about their pension plans and the government agency that insures them is giving Congress, along with older workers across the nation, a sudden case of the jitters. 'We gotta do something' is the phrase du jour on Capitol Hill, and senators and representatives are calling hearings and wringing their hands over the problem." (The Washington Post; one-time registration required)
Commentary on the Basics of SIMPLE IRA Plans
Excerpt: "The SIMPLE IRA is a plan for employers with 100 or fewer employees. The major virtue of this plan is that nondiscrimination testing is eliminated. The SIMPLE IRA also has certain administrative aspects that make it the plan of choice for many small employers." (McKay Hochman Co., Inc.)
Links to Items on Executive Comp, Benefits in General
SEC Guidance on PCAOB Auditing Standard No. 2
Excerpt: "Pursuant to Section 107(b) of the Sarbanes-Oxley Act of 2002 ... notice is hereby given that on September 16, 2004, the Public Company Accounting Oversight Board ... filed with the Securities and Exchange Commission ... the proposed rule described in Items I and II below, which items have been prepared by the Board and are presented here in the form submitted by the Board. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons." (Securities and Exchange Commission)
PCAOB Staff Questions and Answers on Auditing Internal Control Over Financial Reporting (PDF)
10 pages. Excerpt: "The following staff questions and answers related to PCAOB Auditing Standard No. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements ('Auditing Standard No. 2'), were prepared by the Office of the Chief Auditor. The staff questions and answers related to Auditing Standard No. 2 are sequentially numbered upon issuance. Refer to the staff questions and answers dated June 23, 2004 for questions numbered 1-26." (Public Company Accounting Oversight Board)
The Principal Financial Well-Being Index: Executive Summary of Survey Findings - Third Quarter 2004
Excerpt: "The Principal Financial Group, the nation's 401(k) leader, commissioned Harris Interactive® to conduct online research with employees (ages 18+) of small and mid-sized U.S. businesses (firm size 10 - 1,000 employees) about their attitudes and perceptions regarding their financial well being. Harris Interactive conducted The Principal Financial Well-Being Index survey with over 1200 employees online from August 19 to September 2, 2004." (Principal Financial Group)
IRS Provides Information on Disaster Tax Relief, Including Extension of Form 5500 Filing Deadline
Excerpt: "Whenever plan administrators and other entities believe they are entitled to a Form 5500 extension due to a natural disaster, they should consult the IRS website or contact the IRS directly. Note that whatever postponement of the Form 5500 filing due date is permitted by the IRS for such events also will be permitted by the DOL and PBGC for similarly situated plan administrators and direct filing entities.' See http://www.irs.gov/newsroom/article/0,,id=129002,00.html. (Employee Benefits Institute of America)
IRS Announces Special Tax Relief for Floridians in the Disaster Area Struck by Hurricane Jeanne
Excerpt: "The [Presidential] disaster area consists of 41 counties: Alachua, Baker, Bradford, Brevard, Charlotte, Clay, Columbia, Dixie, Duval, Flagler, Gilchrist, Hamilton, Hardee, Hernando, Highlands, Hillsborough, Indian River, Jefferson, Lafayette, Lake, Madison, Marion, Martin, Nassau, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, St. Johns, St. Lucie, Sarasota, Seminole, Sumter, Suwannee, Taylor, Union and Volusia." (Internal Revenue Service)
Executive Summary of Carolinas Employee Benefits Trends Survey Report of Findings (PDF)
Excerpt: "This survey of employers in the Carolinas gives us information against which to benchmark the trends in employee benefits. The survey's 84 respondents primarily represent organizations with less than 5,000 employees. Most were in North Carolina, with 40% from manufacturing and healthcare industries. The survey focused on four topic areas, which were healthcare, retirement, communication and outsourcing." (Aon Consulting)
Newly Posted Press Releases
U.S. Labor Department Extends Annual Reports Deadline After Hurricane Jeanne Hits Florida
(U.S. Department of Labor, Office of Public Affairs, Atlanta)
Transamerica Retirement Services Launches New Fund Offering; Target Retirement Funds Provide Straightforward Investment Management Solution for Retirement Plan Participants
(Transamerica Retirement Services)
Businesses Decrease Salaries, Hiring, and Other Benefits to Compensate for High Health Care Costs
(Society for Human Resource Management (SHRM))
Correction To Release 04-1848-NAT on Frances Hurricane Relief for North Carolina
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Newly Posted or Renewed Job Openings
Senior 401(k) Plan Specialist
for CitiStreet - A State Street and Citigroup company
in MA
Compliance Analyst
for EMJAY Retirement Services, A Great-West Company
in WI
Project/Process Consultant
for Hewitt Associates
in GA
Marketing Specialist (Proposal Writer)
for ICMA Retirement Corporation...a mutual fund organization
in DC
Advanced Consultant
for Hewitt Associates
in MN
Retirement Services - Implementation Consultant
for Administaff
in TX
HM Project Manager
for Hewitt Associates
in NJ
Relationship Manager
for Transamerica
in CA
Director Executive Benefits & Pensions
for CUNA Mutual Group - Credit Union Employee Solutions
in WI
Defined Contribution Plan Administrator
for Midwest Benefit Consultants, Ltd.
in IL
Junior DC Plan Administrator or Trust Accountant
for The Pension Group, Inc.
in CA
401k Compliance Analyst
for ADP Retirement Services
in NJ
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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