| BenefitsLink Retirement Plans Newsletter |   |
October 21, 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)
Overview: DOL Final Regulation Requires Amendment to Automatic Cash-Out Provisions
Excerpt: "Mandatory distributions from all tax-qualified retirement plans covered under Title I of ERISA are subject to the new regulation, including stock bonus, pension and 401(k) plans. Plans that provide for the automatic cash-out of distributions between $1,000 and $5,000 are subject to the new regulation, although the safe harbor may also be extended to amounts less than $1,000." (McDermott Will & Emery)
IRS Releases Technical Guidance on Deductibility of 401(k) Contributions after End of Plan Year (PDF)
Excerpt: "On October 1, 2004 the IRS released technical guidance on the Deduction of Contributions to IRC 401(k) Plan or to a Defined Contribution Plan as Matching Contribution Under IRC 401(m) Attributable to Compensation Earned After the End of the Tax Year Under IRC 404(a)(6). Taking into account previous IRS rulings, especially Revenue Ruling 2002-46, the IRS discusses when 401(k) contributions or matching contributions should be deducted by an employer ...." (Internal Revenue Service via International Foundation of Employee Benefit Plans)
IRS Announces Pension Plan Limitations for 2005
News Release IR-2004-127 (October 20, 2004) set forth limits on benefits and contributions that were modified, either due to cost-of-living adjustments or due to EGTRRA-mandated changes, for 2005. (Internal Revenue Service)
Chart of Maximum Benefits & Contributions Limits Updated to Reflect 2005 Limits
Carol Calhoun's chart of benefits and contributions limits from 1996 to the present has now been updated to reflect the 2005 limits, as announced in News Release IR-2004-127 (October 20, 2004) and the corresponding Social Security Administration news release (October 19, 2004). (Calhoun Law Group, P.C.)
Discussion on the 2005 Social Security and Medicare Program Cost-of-Living Adjustments (PDF)
Excerpt: "[The] release of the September Consumer Price Index will affect benefits under the Social Security and Medicare programs in 2005. Milliman's Client Action Bulletin 04-22 discusses the cost-of-living adjustments to these programs and their implications for employers." (Milliman)
United Airlines Pilots to Demand Better Pension Deal Than Other Employees If Plans Are Terminated
Excerpt: "UAL Corp. will announce it is ending its pension plans in a few weeks. When it does, its pilots union will insist on getting a better replacement benefit than other workers get, said the union's leader. The pilots won't accept any management demand that all labor groups get the same 401(k) plan 'when the pilots are harmed so disproportionately' in a pension termination, said Captain Mark Bathurst, who also serves on UAL's board." (Rocky Mountain News)
Senate Passes Bill to Allow Penalty-Fee Distributions for Reservists and Guardsmen
Excerpt: "Legislation (H.R. 1779) to allow military reservists and National Guardsmen to make penalty-free withdrawals from IRAs and other retirement plans during a specified period of active duty was passed by the Senate on October 11, 2004. The bill, which amends a House bill that passed earlier in the year, must now return to the House for a vote, possibly in November before the Congress adjourns sine die." (CCH Pension & Benefits News)
Two Plans to Avoid Future Social Security and Medicare Nightmare Scenario
Excerpt: "Social Security and Medicare--the government's two main 'entitlement' programs for the elderly--have drawn increasing attention by the candidates ... just as they have in past races. But the contest between Bush and Kerry is different from past races--the first Baby Boomers will reach 62, or early retirement age, on Jan. 1, 2008, a year before the end of the next presidential term. And from that point on, the fiscal conditions of both programs will begin to deteriorate." (Chicago Tribune via Yahoo! News)
Name Change Announced: BenefitsRestoration@IBM Becomes BenefitsRestoration, Inc
Excerpt: "Why the name change? When we started this organization, we thought 'BenefitsRestoration@IBM' sounded both snappy and self-explanatory. However, we later learned that in order to register as a 501c4, we must not restrict our focus to just one group (i.e., IBM retirees). From the beginning, the board has felt that the retiree medical benefits issue affects not just IBM and its retirees, but in fact is something that concerns all retirees and all people who hope one day to retire." (BenefitsRestoration, Inc)
The Proposed New Social Security System: Less Costly than the Old
Excerpt: "During his acceptance speech at the Republican National Convention, President Bush reinforced his commitment to modernize Social Security when he said, 'We must strengthen Social Security by allowing younger workers to save some of their taxes in a personal account -- a nest egg you can call your own, and government can never take away.' Such legislation would be the most fundamental, and needed, reform since President Roosevelt introduced Social Security ... as part of his New Deal." (Investor's Business Daily via Cato Institute)
Links to Items on Executive Comp, Benefits in General
The Real Consequences for Companies of Pension Fund Return and Health Cost Projections
Excerpt: "Analysts have repeatedly criticized companies with pension plans for using assumptions that appear too optimistic given current financial conditions. Those who follow the auto industry said yesterday that the automakers' accounting practices were not out of the norm for corporate America; however, the regulators appear to be reviewing whether the standard practices themselves are appropriate." (The New York Times; one-time registration required)
Analysis: Congress Approves Changes to the Tax Rules for Nonqualified Deferred Compensation Plans (PDF)
14 pages. Excerpt: "These changes are not limited to just traditional salary and bonus deferral programs. The new rules affect supplemental executive retirement plans (SERPs), statutory restoration plans, equity-based compensation arrangements such as stock appreciation rights (SARs) and restricted stock units (RSUs), long-term incentive plans and directors' fee deferral programs." (McDermott Will & Emery)
Opinion: Congress Revisits 'Bridge on the River Kwai' with Nonqualified Deferred Compensation Change
Excerpt: "The U.S. Congress has decided to meddle once again in the world of executive compensation. Some of what it has done in the American Jobs Creation Act of 2004 is good. Some of it is awful. Most of the pay aspects of the new law are aimed at limiting the ability of an executive to defer his salary, bonus or other incentive payments to some future year." (Graef Crystal via Bloomberg.com)
CEO and Outside Director Pay Rises in All Industries According to Annual Compensation Studies
Excerpt: "Median total compensation for outside (non-employee) directors of U.S. boards is higher than last year's median in all three major industry sectors covered in The Conference Board's annual study of outside director pay. The study is based on a survey of directors' compensation and board practices in 510 companies. The oversight role of corporate boards is intensifying, resulting in significantly higher demands on board members." (The Conference Board)
U.S. Labor Dept. Extends Annual Reports Deadline After Tropical Storm Frances Hits South Carolina
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) [on October 19, 2004] announced an extension of the deadline for filing Form 5500 and Form 5500 EZ annual report/returns due to damages from tropical storm Frances in South Carolina." (U.S. Department of Labor, Employee Benefits Security Administration)
U.S. Labor Dept. Extends Annual Reports Deadline After Tropical Depression Ivan Hits New York
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) [on October 19, 2004] announced an extension of the deadline for filing Form 5500 and Form 5500 EZ annual report/returns due to storm damages from tropical depression Ivan in New York." (U.S. Department of Labor, Employee Benefits Security Administration)
U.S. Labor Dept. Extends Annual Reports Deadline After Tropical Depression Ivan Hits New Jersey
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) [on October 19, 2004] announced an extension of the deadline for filing Form 5500 and Form 5500 EZ annual report/returns due to storm damages from tropical depression Ivan in New Jersey." (U.S. Department of Labor, Employee Benefits Security Administration)
U.S. Labor Dept. Extends Annual Reports Deadline After Severe Storms and Flooding Hit Minnesota
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) [on October 19, 2004] announced an extension of the deadline for filing Form 5500 and Form 5500 EZ annual report/returns due to damages from severe storms and flooding in Minnesota." (U.S. Department of Labor, Employee Benefits Security Administration)
Treasury/IRS Officials Discuss How Various Legislation Will Affect Employee Benefit Plan Guidance
Excerpt: "A panel of key Treasury Department and IRS officials reviewed anticipated new guidance in light of pending and enacted legislation at an [ALI-ABA] conference on October 8, 2004. The conference, 'Current Treasury and IRS Issues: Treasury Update; Important Legislative Developments; Current Issues; New Regulations; Rulings, and Other Guidance' featured Marjorie Hoffman, Robert Misner, Monika Templeman and Martin Pippens ... and William Sweetnam, Jr. ...." (CCH Pension & Benefits News)
Overview: FASB Decides on Effective Date for Option Expensing (PDF)
4 pages. Excerpt: "The Financial Accounting Standards Board (FASB) made several important tentative decisions over the last week in regard to the effective date for its project on expensing employee equity based compensation. Mandatory stock option expensing for public companies would commence on a 'modified prospective' basis for quarterly reporting periods beginning after June 15, 2005, and for annual reports including those affected quarters." (Frederic W. Cook & Co., Inc.)
Newly Posted Events
Automatic Rollovers & Lost Participants Web Seminar
Nationwide on November 2, 2004
presented by SunGard Corbel
Wellness Fair
in Massachusetts on November 17, 2004
presented by Worldwide Employee Benefits Network (WEB)
Newly Posted Press Releases
The SPARK Institute Meets With SEC To Outline Technology Enhancement To The SPARK Solution Alternative To “Hard 4 P.M.” Close
(RG Wuelfing & Associates)
Newly Posted or Renewed Job Openings
401(k)/Defined Contribution or Defined Benefit Compliance Analyst
for National Retirement Services, Inc.
in
Client Services Central Regional Manager
for Transamerica
in IL
Administrative Assistant - 401k
for Qualified Benefits, Inc.
in CA
Account Executive - Client Relationship Management
for Diversified Investment Advisors
in MA
Pension Administrator
for The Pension Service, LLC
in MA
Benefits and Employee Service Center Manager -Benefits
for Ochsner Clinic Foundation
in LA
Project Manager - Health Programs
for Kohler Co.
in WI
Account Administrator
for Fortress Retirement Services, Inc.
in IA
Actuary
for MassMutual Financial Group
in MA
Retirement Services Director - Sales
for CitiStreet
in CA, WA
Senior Product Manager
for National City
in OH
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
Copyright 2004 BenefitsLink.com, Inc.; except that you can reprint this newsletter in full (if you also include this boilerplate part) without obtaining our permission.
Published by:
BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
Editor and Publisher: David Rhett Baker, J.D.
Housekeeping: