| BenefitsLink Retirement Plans Newsletter |   |
October 22, 2004
Today's sponsor: APSCREEN, Employee Locator
(Click on company name or banner to learn more.)
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Overview: Automatic Rollover Regulations Trigger Plan Amendment Requirement
Excerpt: "Recent regulations trigger a requirement that most employers with tax-qualified retirement plans amend their plans by March 28, 2005. Employers have long been permitted to distribute to an employee (i.e., 'cash out'), without the employee's consent, the employee's retirement benefits if the value of those benefits is $5,000 or less and the employee has terminated employment." (Dorsey & Whitney LLP)
Big Fees Can Erode Small-Scale Retirement Plans' Returns and Assets
Excerpt: "The retirement savings of millions of Americans are being seriously eroded because of the high fees charged to administer their 401(k) plans. Most at risk are employees of small companies. Studies show that many participants in 401(k) plans sponsored by companies with fewer than 50 employees pay far more in fees than their large-company peers. Investors in 50-person plans pay an average of 1.4 percent of their assets annually in fees, or about $14 for every $1,000 invested ...." (Wall Street Journal via SFGate.com)
Working Paper: the Case Against Stock in Public Pension Funds (PDF)
18 pages. Excerpt: "A government has $1 million of stock in a pension fund that covers its employees. The liability can be matched with a $1-million dedicated bond portfolio. What are the consequences of shifting the pension fund from equities to bonds? The paragraph above duplicates the opening paragraph of The Case Against Stock in Corporate Pension Funds (Bader 2003), except that we have substituted a governmental plan for a corporate plan. Does this substitution matter?" (Pension Research Council, The Wharton School, University of Pennsylvania)
Towers Perrin U.S. Legislative Tracking Chart -- Retirement -- Updated October 21, 2004 (PDF)
Excerpt: "[The chart summarizes] selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
PBGC Takes Over and Terminates Kemper Insurance Company's Underfunded Pension Plan
Excerpt: "The Pension Benefit Guaranty Corp. on Thursday took over and terminated Kemper Insurance Cos.' underfunded pension plan, the biggest insurer-sponsored pension plan ever assumed by the PBGC. Kemper's retirement plan has promised $1.05 billion in benefits to its nearly 12,000 participants--mostly retirees and former employees of operating unit Lumbermens Mutual Casualty Co.--but has just $515 million in assets." (Business Insurance)
Links to Items on Executive Comp, Benefits in General
Towers Perrin Legislative Tracking Chart -- Human Resources -- Updated October 21, 2004 (PDF)
8 pages. Excerpt: "The chart summarizes selected federal legislation that would affect employee benefit programs." (Towers Perrin)
Discount Rate Selection to Measure Liabilities for Disclosures Presents New Issues This Year
Excerpt: "Selecting a discount rate to measure liabilities for year-end financial disclosures is always an important process for employers sponsoring pension and retiree welfare plans, but there are special factors this year that may cause many companies to adopt a revised process. The financial and reporting requirements under the Sarbanes-Oxley Act, increased scrutiny by analysts and regulators, a heightened focus by audit firms on plan assumptions, ...." (Towers Perrin)
US Airways Pilots Vote to Take 18% Pay Cuts and to Accept Elimination of Retiree Health Care
Excerpt: "The vote means members of the Air Line Pilots Association ... are exempt from the emergency cuts. Instead, their pay will be cut 18 percent a year, a total of $1.8 billion in savings for the airline through 2010. The new contract will also sharply reduce US Airways' contribution to the pilots' retirement plan, eliminate health care benefits for pilots after they retire, and increase the number of hours that pilots must fly each month." (The New York Times; one-time registration required)
Opinion: Why Take G.ay Couples' Only Benefit Away with Michigan's Proposal 2 Amendment?
Excerpt: "About the only benefit we as a couple have enjoyed here in Detroit is the domestic partner medical and dental insurance available through my job at Wayne State University. The amendment prohibits not only marriage between same-sex couples, but also the recognition of any 'similar union for any purpose' -- hence, no civil unions nor domestic partnerships." (Christopher T. Leland via Detroit Free Press)
Cindie Moore, Washington Counsel of NCTR, October 18, 2004, Update of Federal Report to Members (PDF)
7 pages. Excerpt: "The most urgent issues for NCTR members at present are regulatory, not legislative. The report describes three regulatory items, two of which are action items and the third is an issue that will likely require action shortly. The report then provides information about the top legislative issues." (National Council on Teacher Retirement)
Labor Department Doubles Workers' Retirement and Health Benefit's Recovery This Year
Excerpt: "The Labor Department recovered or protected $2.85 billion in workers' retirement and health benefits from illegal transactions or fraud in the past year, more than doubling its results from 2003. Settlements reached this year with Enron Corp. and WorldCom Inc., among the largest corporate scandals that lost millions of dollars in workers' retirement plans, aren't included in the figures released Thursday by the department's Employee Benefits Security Administration." (The New York Times; one-time registration required)
Full Text of the Milliman Global Employee Benefits Newsletter for September 2004 (PDF)
12 pages. The issue includes the following articles: A German Perspective on the Impact of IAS 19, The New Pension Protection Fund in the United Kingdom, and Recent Developments in Spanish Pensions. (Milliman)
Full Text of the Milliman Global Employee Benefits Newsletter for September 2004 (PDF)
12 pages. The issue includes the following articles: A German Perspective on the Impact of IAS 19, The New Pension Protection Fund in the United Kingdom, and Recent Developments In Spanish Pensions. (Milliman)
Stock Plan Popularity Contest: Winners and Losers Under New Accounting Rules
Excerpt: "For decades, stock options have been the most common form of long-term incentive at large companies, thanks largely to favorable accounting treatment. Until recently, virtually all companies followed Accounting Principles Board Opinion No. 25 (APB 25), which favors some types of incentive plans over others. Traditional stock options and employee stock purchase plans (ESPPs), for instance, usually incur no expense under APB 25." (Towers Perrin)
Newly Posted Press Releases
PSCA Announces 2004 Signature Award Winners
(Profit Sharing/401(k) Council of America (PSCA))
Alliance Benefit Group Raising The Bar On Employee Competency
(Alliance Benefit Group)
PBGC To Protect Pensions At Lumbermens Mutual Casualty Co.
(Pension Benefit Guaranty Corporation (PBGC))
U. S. Labor Secretary Elaine L. Chao Announces Stronger Retirement, Health Benefit Security for American Workers
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Newly Posted or Renewed Job Openings
401(k) Enroller/Contractor
for Transamerica-The Winning Organization
in CA
401(k) Enroller/Contractor - Bilingual
for Transamerica
in CA
Client Services Consultant-San Antonio
for One America
in TX
DB Ongoing Project Manager
for Hewitt Associates
in CT
Defined Contribution Plan Administrator
for BFP Associates
in MA
Enrolled Actuary
for Long Island Employee Benefits Group, Ltd.
in NY
Sr. Education Account Executive- Retirement Services
for Principal Financial Group
in LA
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- Using the Web for Employee Benefits Research
- Employee Benefits Library
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