| BenefitsLink Retirement Plans Newsletter |   |
October 27, 2004
Today's sponsor: www.ftwilliam.com
(Click on company name or banner to learn more.)
Register for our free on-line demo! www.ftwilliam.com offers the employee benefits professional the highest quality plan documents and forms at highly competitive prices. Plan documents on a per document basis are only $50/adoption agreement, or $100/volume submitter document (including cross testing). An annual subscription to all documents is only $1,500. The Form 5500 package and the IRS/PBGC form package are only $250 each. Prices include access for five concurrent users.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Mutual Fund Industry Abuses Go Unchecked; SEC Still Weighing Market-Timing, Late-Trading Proposals
Excerpt: "More than a year after Eliot Spitzer exposed widespread corruption in the mutual-fund industry, reform measures aimed at ending the most glaring abuses are still awaiting action by federal regulators. It's been 14 months since New York's attorney general leveled charges against the industry, but the Securities and Exchange Commission has yet to vote on rules to rein in late trading and market timing, the improprieties at the center of the scandal." (CBS MarketWatch.com)
Credit Card Access to 401(k) Savings on the Way?
Excerpt: "Will convenient access to savings in 401(k) plans encourage workers to put away more money for their future or tempt them to drain their retirement accounts? .... After financial services company ING receives final regulatory approval, the new card will be introduced to employers and 401(k) plan participants, who will be able to borrow their own money without going through a complicated loan process." (AccountingWEB.com)
Overview: Guidance on How Missing Participants in a Defined Contribution Plan Should Be Handled
Excerpt: "[I]t is very welcome news that the Department of Labor (DOL) has issued guidance (Field Assistance Bulletin 2004-2) on missing participants for defined contribution plans. The guidance emphasizes that the employer has a fiduciary responsibility under ERISA to attempt to locate missing participants when the plan is either being terminated or when an involuntary cash out of under $5,000 is about to be made and a distribution election can not be secured." (McKay Hochman Co. Inc.)
McKay Hochman Issues Correction to Chart of Safe Harbor 401(k) Plan Formulas Previously Published
Excerpt: "We need to correct an error in the chart of safe harbor 401(k) plan formulas that was included in Alert 2004-18 (September 3, 2004). The example identified as Plan 6 stated that a safe harbor 401(k) plan with [certain design features] would meet the safe harbor but would still require top heavy testing. However, that is not the case. Such a design would be exempt from the top-heavy test. See the article ... for details." (McKay Hochman Co. Inc.)
How America Saves: a Report on Vanguard's Defined Contribution Plans 2004
92 pages. Excerpt: "Illustrated with numerous charts and tables, [the report] is a valuable reference tool for organizations evaluating their retirement plan offerings, as well as for industry consultants, the media, and researchers. This book-length report provides an overview of U.S. retirement plans; an analysis of savings, investing, and account activity trends in Vanguard® defined contribution plans; and insights and strategies on a variety of issues, including retirement savings adequacy." (The Vanguard Group)
Retirement Calculators off Target: Software Oversimplifies Assumptions, Skews Long-term Goals
Excerpt: "Among other oversimplifications, most of these free applications assume static rates of inflation and investment returns when in reality these factors fluctuate widely. 'A much more accurate approach looks at the likelihood that you will reach a particular investment goal if you do certain things,' ....' (CBS Mar.ketWatch.com; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Full Text: the FASB Embarks on a Historic Change to the Structure of U.S. Accounting Standards (PDF)
2 pages. Excerpt: "Creating a single source of U.S. GAAP requires the cooperation of the FASB, the AICPA, and the SEC. The FASB has been working with the AICPA to address a revised definition of U.S. GAAP. The FASB also has had discussions with the SEC on methods of integrating SEC literature into the codification. Upon completion of the codification project, the codification will represent the sole authoritative source of U.S. GAAP." (Financial Accounting Standards Board)
Comments of B. Janell Grenier on Plan Sponsor's Article, 'Lawyering Up,' on ERISA Lawsuits' Trends
Excerpt: "What should plan fiduciaries be doing in light of the trend? Hiring a qualified ERISA attorney to advise the plan sponsor and fiduciaries about best practices and 'prudent process and procedures' is really the best first step that a plan sponsor can take in protecting the company and fiduciaries from liability due to unexpected ERISA lawsuits." (Attorney B. Janell Grenier via BenefitsBlog.com)
Full Text of Regulatory Update, September 2004, Published by Employee Benefit Plan Review (PDF)
3 pages. The update includes articles on Disclosure Requirements Delayed for Relative Values of Certain Optional Forms of Benefit, Final Required Minimum Distribution Regulations for Defined Benefit Plans, HSAs for Individuals in States Without High Deductible Health Plans, 'Deemed IRA' Regulations, House Bill to Block Stock Option Expensing, and Department of Labor Regulatory Agenda. (Employee Benefit Plan Review via Gardner Carton & Douglas)
Full Text of October 2004 Edition of the Regulatory Update Published by Employee Benefit Plan Review (PDF)
3 pages. This update covers Restrictions on Amendments to Pension Plans That Receive Funding Relief, Developments in Accounting for Stock Options, New SEC Disclosure Requirements for Certain Executive Compensation Arrangements, IRS 2004–2005 Guidance Plan, IRS Tax Exempt Compensation Enforcement Project, and the Department of Labor Regulatory Agenda. (Employee Benefit Plan Review via Gardner Carton & Douglas)
Full Text of CBO Cost Estimate of H.R. 4520, American Jobs Creation Act of 2004 (PDF)
11 pages. Excerpt: "The [CBO] and the Joint Committee on Taxation (JCT) estimate that this legislation will decrease federal revenues by about $4.9 billion in 2005, $10.1 billion over the 2005-2009 period, and $6.8 billion over the 2005-2014 period. CBO estimates that H.R. 4520 will increase outlays resulting from direct spending by $764 million in 2005, but will decrease direct spending by about $1.4 billion over the 2005-2009 period and $6.8 billion over the 2005-2014 period." (Congressional Budget Office)
Opinion: Countrywide's CEO Mozilo Gets Crazy Bonus Plan According to Crystal
Excerpt: "Angelo Mozilo, the chief executive officer of Countrywide Financial Corp., is a fine performer. .... The 65-year-old Mozilo's pay packages have been breathtaking, considering the size of his company. From 2001 through 2003, his total pay was, respectively, $21.2 million, $15.6 million and $31.8 million. (Total pay consists of salary; bonus; my estimate for the present value of stock options, ...; the value of free shares awarded; payouts under other long-term incentive plans; ...." (Graef Crystal via Bloomberg.com)
Overview: Companies Must Swiftly Address New Tax Rules for Deferred Compensation (PDF)
2 pages. Excerpt: "A little-noticed part of the American Jobs Creation Act of 2004, which was signed by the president on October 22, 2004, mandates massive changes for nonqualified deferred compensation plans. The new rules will require changes to virtually every deferred compensation arrangement, including many that have not previously been viewed as deferred compensation (such as discounted stock options)." (Legal Times via Buchanan Ingersoll)
Special Edition on Nonqualified Deferred Compensation Plans Legislation Published by Baker Daniels
Excerpt: "The American Jobs Creation Act of 2004 ... is in the process of revolutionizing the world of deferred compensation. On the positive side, the new Act resolves decades of uncertainty created by conflicts between IRS positions and federal court authority. On the negative ..., it eliminates many common plan designs and magnifies the risks of being wrong. In essence, Congress has now created a new category of semi-qualified deferred compensation plans.' [hypertext question & answer format] (Baker & Daniels)
White-Collar Workers See Salary Increases Held Down
Excerpt: "Despite hopes that an improving economy would bolster wages, salary increases for white-collar workers are stuck at an average 3.4 percent this year and are expected to total no more than 3.6 percent next year, according to human-resources consulting firm Hewitt Associates. The skimpy pay raises for the white-collar crowd follow two prior years of lean increases. After steady 4 percent and 5 percent increases during every year but one in the 1990s, ...." (Wall Street Journal via SFGate.com)
Newly Posted Events
401(k) Plans
in Colorado on November 16, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
Cafeteria Plans
in Colorado on November 17, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
COBRA Compliance for Group Health Plans
in Colorado on November 19, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
Consumer-Driven Health Care & Fringe Benefits
in Colorado on November 18, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
ERISA Compliance for Health & Welfare Plans
in Colorado on November 18, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
HIPAA Portability & Privacy
in Colorado on November 19, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
Washington Update with Brian Graff
in Arizona on November 11, 2004
presented by Western Pension & Benefits Conference - Phoenix Chapter
Newly Posted Press Releases
Watson Wyatt, National Business Coalition On Health Announce Partnership To Evaluate Health Plans
(Watson Wyatt)
PBGC Launches Spanish-Language Website
(Pension Benefit Guaranty Corporation (PBGC))
Newly Posted or Renewed Job Openings
Senior IT Quality Assurance Analyst
for ExpertPlan
in NJ
Defined Contribution Analyst
for Standard Insurance Company
in OR
Benefits Analyst
for Benefits Group WorldWide, Inc.
in CA
Tax Specialist
for Eastman Kodak Company
in NY
Conversion Representative
for BISYS Retirement Services
in PA
Retirement Services Product Manager
for Administaff
in TX
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: