| BenefitsLink Retirement Plans Newsletter |   |
October 18, 2004
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
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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)
The End to CalPERS As We Know It? California Assemblyman Offers Defined-Contribution Proposal
Excerpt: "Alarmed by the spiraling cost of public pensions, a Southern California legislator plans to propose 401(k)-style retirement plans for public employees in California. The measure, proposed by Assemblyman Keith Richman R-Granada Hills, is certain to face stiff resistance from the state's powerful public employee unions, who feel the current pension system, called a defined-benefit plan, provides better benefits than Richman's defined-contribution plan." (The Argus)
California Local Governments Borrowing Heavily to Cover Growing Pension Shortfalls
Excerpt: "Local governments in California are borrowing money this year at a rate unmatched in the past decade .... So far in 2004, local governments with pensions outside the giant California Public Employees Retirement System have issued nearly $1.7 billion in bonds just to pay for existing pension shortfalls. With three months left in 2004, that's 50 percent higher than any year in the last decade, according to data from the California Debt and Investment Advisory Commission." (AP via Kansas City Star)
Financial Planning Matters: Will Pre-Retirees Lose Retirement Dreams With Today's Savings Plans? (PDF)
7 pages. Excerpt: "Sweeping changes to retirement planning dramatically affect how individuals invest for their retirement years and who bears responsibility for such savings. These changes should prompt you to ask: Am I adequately prepared for retirement? In the recent past, employers and the U.S. government assumed the majority of the responsibility for saving for people's retirement through defined-benefit plans." (Lincoln Financial Group)
Building Futures, Vol. V, Fidelity Investments' Report on 2003 Corporate Defined Contribution Plans
Excerpt: "The data in this report were compiled from corporate defined contribution plans for which Fidelity Employer Services Company has performed recordkeeping services. In 2003, this Fidelity client base exceeded 8 million participants enrolled in more than 10,000 plans. .... If you don't have a username or password and would like access to the report, please e-mail BuildingFutures@FMR.com and provide your name, company name and e-mail address." (Fidelity Investments; registration required)
'Autopilot' 401(k)s Taking Off
Excerpt: "People realize they are not saving enough, according to surveys, but they simply aren't doing anything to improve the situation. So, says The Saturday Early Show financial adviser Ray Martin, many employers, mutual fund companies and financial consultants are pushing a 401(k) concept that works with human behavior rather than against it. 'The autopilot 401(k) plan concept is to make certain decisions an automatic part of the plan ...' Ray explained." (The Early Show via CBSNews.com)
Overview: Rule Change on Deemed IRAs Does Not End Employer Concerns
Excerpt: "The Internal Revenue Service has finalized rules on Deemed IRAs, clearing the way for employers to adopt them. But no one seems interested. The idea of a Deemed IRA is to make it easier for individuals to save through Individual Retirement Accounts by having an employer offer the IRA along with the organization's existing retirement plan. Deemed IRAs came available last year, but response from employers has been weak, vendors say." (Employee Benefit News)
Mutual Fund Scandals End Age of Innocence for Defined Contribution Plans
Excerpt: "Like so many other areas of the financial services industry, 401(k) and defined contribution plans have been forever changed by the mutual funds scandals of the past year and their aftermath. But while the industry gropes through these difficult times, the results for plan sponsors have been very positive and will continue to get better." (Employee Benefit News)
Speech Outline, 'Federal Law Update, 2003-2004', Discusses Developments Affecting Governmental Plans
Topics covered: Department of Labor Regulations on Mandatory IRA Rollovers of Small Cashouts (September 28, 2004); IRS guidance on deferral of termination pay; Minimum Distribution Rules under Internal Revenue Code section 401(a)(9) (June 14, 2004); Department of Labor Guidance on Missing Participants in Terminating Defined Contribution Plans (Field Assistance Bulletin 2004-02 (September 30, 2004)); and Deemed IRAs (section 408(q)). (Calhoun Law Group, P.C.)
Asking the Big Spending American Consumer Society to Save and Invest Big, Too
Excerpt: "President Bush has made what he calls the Ownership Society the central domestic theme of his re-election campaign: 'The more ownership there is in America, the more vitality there is in America,' is how he put it in June. The president is really saying that Americans should take more responsibility for their own financial well-being, mainly by saving more." (The New York Times; one-time registration required)
Congressman George Miller Opens Inquiry Into Halliburton Pension Reductions
Excerpt: "Representative George Miller, a California Democrat, opened an inquiry Friday about the Labor Department's lack of response, after two years, to a group of former Halliburton employees who sought its help when the company unexpectedly reduced their pensions. Mr. Miller, the ranking Democrat on the House Education and Workforce Committee, sent a letter to the Labor secretary, Elaine L. Chao, asking for information about the department's handling of the case." (The New York Times; one-time registration required)
Kerry Campaigning Furiously While Pushing Social Security As an Issue for Voters
Excerpt: "Accusing President Bush of plotting a 'January surprise' to cut Social Security benefits, Senator John Kerry told voters here and in Ohio on Sunday that Mr. Bush's plans for privatizing the entitlement program could cost them as much as 45 percent of their monthly checks." (The New York Times; one-time registration required)
Issue Brief: Socially Responsible Investing: How the SRI Industry Has Failed to Respond (PDF)
36 pages. The report examines financial management companies that offer mutual funds that screen their portfolios against nonfinancial criteria. It also outlines steps the industry can take to improve its social responsibility. (Paul Hawken and National Capital Institute)
Links to Items on Executive Comp, Benefits in General
OneCLE Publishes Sample Qualified and Nonqualified Retirement Plans Online
The site currently includes sample plans from Halliburton Co., JetBlue Airways Corp., Moody's Corp., and many more. (OneCLE Inc.)
Post Retirement Risks Chart Shows Changing Needs and Resources During the Retirement Years
5 pages. Excerpt: "Review the hazards individuals can face during retirement and learn how to make smart choices!' (Society of Actuaries)
Overview: Congress Passes Legislation on Non-Qualified Deferred Compensation Arrangements (PDF)
Excerpt: "After years of failed proposals, Congress has finally passed legislation designed to establish clear limitations on non-qualified deferred compensation arrangements. This legislation is far reaching and will require all employers to take immediate action, including an immediate assessment of plans, agreements and arrangements that may include deferred compensation arrangements. .... The key provisions of the Act are listed in this Alert." (Mintz Levin Cohn Ferris Glovsky and Popeo P.C.)
Analysis: the Impact of the New Nonqualified Deferred Compensation Legislation (PDF)
Excerpt: "The purpose of this alert [written in very readable chart form] is to highlight for employers the key areas of their nonqualified deferred compensation plans that will be affected by the enactment of the new nonqualified deferred compensation legislation." (Gardner Carton & Douglas)
Analysis: the Impact of the New Nonqualified Deferred Compensation Legislation on 457(f) Plans (PDF)
Excerpt: "The purpose of this alert is to highlight for tax-exempt employers the key areas of their Code Section 457 plans that will be affected by the enactment of the new nonqualified deferred compensation legislation." (Gardner Carton & Douglas)
Overview: New Deferred Compensation Tax Legislation Imposes Significant Changes
Excerpt: "On October 11, 2004, Congress passed the American Jobs Creation Act of 2004. The President is expected to sign the Act soon. The Act adds a new section 409A to the Internal Revenue Code, which significantly changes the operation and taxation of nonqualified deferred compensation arrangements for amounts deferred on or after January 1, 2005." (Faegre & Benson LLP)
Overview: Congress Approves Broad Changes to Nonqualified Deferred Compensation Arrangements (PDF)
Excerpt: "On October 11, 2004, Congress passed the American Job Creations Act of 2004 (the Act). The Act includes an amendment to the Internal Revenue Code of 1986 (the Code) that significantly alters the taxation of nonqualified deferred compensation arrangements and is expected to become law before the end of the year." (Pillsbury Winthrop LLP)
OneCLE Publishes Sample Employment Agreements Online
The site currently includes samples from Abercrombie & Fitch Co., Amazon.com Inc., Apple Computer Inc., and many more. (OneCLE Inc.)
OneCLE Publishes Sample Severance Agreements Online
The site currently includes sample plans from Walt Disney Co., Yum! Brands Inc., Trump Hotels & Casino Resorts Inc., and many more. (OneCLE Inc.)
Overview: FASB Delays Effective Date for Option Expensing Rule
Excerpt: "In its October 13 meeting on equity-based compensation, the Financial Accounting Standards Board (FASB) tentatively decided to delay the effective date of the FAS 123 ruling by six months, to interim or annual periods beginning after June 15, 2005.' Other issues discussed at the meeting include volatility and awards with graded vesting. (Watson Wyatt Worldwide)
Issues in Brief: Will Health Care Costs Erode Retirement Security?
Excerpt: "This brief projects future income and out-of-pocket health care spending at older ages. If current policies continue, income after taxes and health care spending for the typical older married couple will be no higher in 2030 than it was in 2000 -- despite 30 years of productivity growth. The increased health care burden will be particularly painful for those at the lower end of the income distribution who do not qualify for Medicaid." (Center for Retirement Research at Boston College)
Newly Posted Events
2004 Health Insurance Conference: Consumer Driven Healthcare
in Washington on October 26, 2004
presented by IB-Strategies
2004 Health Insurance Conference: Consumer Driven Healthcare
in Washington on October 27, 2004
presented by IB-Strategies
2004 Health Insurance Conference: Consumer Driven Healthcare
in Washington on October 28, 2004
presented by IB-Strategies
Medicare Modernization in a Polarized Environment
in District of Columbia on January 27, 2005
presented by National Academy of Social Insurance
Successful Health Management Systems Seminar
in Florida on February 21, 2005
presented by Wellsource, Inc.
Newly Posted Press Releases
Theoris Introduces New Healthcare Solution for Employees to Reduce Costs, Improve Health
(The Haelan Group)
New Online Health Activity Tracker Can be Tailored by Customers to Fit Their Needs
(Wellsource, Inc.)
Newly Posted or Renewed Job Openings
Plan Administrator
for Abacus Benefit Consultants, Inc.
in RI
Compliance Administrator
for BISYS Retirement Services
in PA
Client Service Representative
for LaRhette Manin Benefits Service Group
in MA
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