| BenefitsLink Retirement Plans Newsletter |   |
November 8, 2004
Today's sponsor: Pension Benefit Information
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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)
United Airlines Makes Pension Plan Terminations Official
Excerpt: "After warning about it for months, bankrupt United Airlines finally announced that it would end its employee pension plans. Now its unions are digesting the information and deciding what to do." (Chicago Sun-Times)
You Could Be Drawing a Smaller Pension Check Than You Had Counted On
Excerpt: "One of the lowest blows that could strike American workers is the denial of retirement benefits for which they have worked long and hard. Just imagine it: You've given 30 years of devotion and sweat to your company; in exchange, you are promised that, upon retirement, you'll draw a monthly pension check to sustain you in your golden years. But then your company files for bankrup.tcy. Or you discover that your company has grossly underfunded your pension plan." (Star Telegram.com; one-time registration required)
When Investment Returns Are Down Plan Participants Expect Less and Most Don't Save More
Excerpt: "Financial advisers say we have to increase our savings for retirement. Some firms are helping workers to do it. Sam Scuderi had modest expectations for his stock portfolio as he began preparing for retirement three years ago, in the depths of the bear market. 'You get to thinking that if you can get 8 percent to 10 percent a year again, it's a great number,' he said. Retirement savers, once wildly optimistic about the stock market, are swinging to the opposite extreme ...." (The Philadelphia Inquirer; one-time registration required)
United Was Simply Following Pension Accounting Rules
Excerpt: "If anyone still needed more evidence, United's move to terminate its pension plans provides the most glaring proof yet: a company can observe federal law scrupulously year after year, and still end up with a hopelessly insolvent pension fund. ... President Gerald R. Ford signed the Employee Retirement Income Security Act, which was supposed to keep insolvencies from happening. The law, known as ERISA, requires companies that offer pensions to set aside money to secure the benefits." (The New York Times; one-time registration required)
The (K)oncept Plan - 2004 Model: Real World Solutions for Managing Defined Contribution Plans
Excerpt: "In the balance of this paper we will discuss numerous commitment devices that can be used to help people behave in a way that is conducive to their long-term financial security. There are many heuristic tools (short cuts) that can be employed to finesse participants into actions they acknowledge are desirable but seem unwilling to take. Accepting this premise is to understand that most people are not risk adverse investors (rational economic agents) but are loss adverse savers." (Stephen J. Lansing via 401khelpcenter.com)
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)
Privatized Social Security Accounts Moved to 'Fast Track' by Bush
Excerpt: "Because revising Social Security and Medicare generally requires unpopular changes in taxes or benefits, the entitlement programs for the elderly have long been described as the 'third rail of politics' -- fatal to politicians who touch them. But Tanner said Bush might have proved otherwise. 'The third rail has lost a lot of its juice,' Tanner said. 'If you look at the election results, this doesn't seem to have hurt the president. He even carried seniors.'" (Los Angeles Times via Yahoo! News)
Democrats Vow to 'Protect' Social Security from Privatization by President Bush
Excerpt: "Democrats vowed on Saturday to protect the Social Security ... retirement program from 'privatization' by President Bush ... and his Republican allies, who expanded their congressional majorities in elections this week. Rep. Nancy Pelosi ... said Democratic lawmakers would work with Bush where they could during his second term, but Social Security was an issue on which they differed with the president." (Reuters via Yahoo! News)
Opinion: How to Fix Taxes and Social Security
Excerpt: "With his reelection won, President Bush says he will move forward on two big domestic issues: the tax system and Social Security. Both are much in need of our attention; there was little serious discussion of either during the presidential campaign. Notwithstanding recent tax cuts, our tax system places a huge burden on middle-class Americans, reducing not just their take-home pay but also their incentives to work and save. And Social Security is a time bomb: ...." (Laurence J. Kotlikoff via The Washington Post; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Responses to the DOL and IRS Request for Comments on EFAST Design Improvements
This page provides access to the comments from nonprofit organizations, employers, plan administrators, service providers involved in preparing and submitting the Form 5500 series, accountants, financial institutions, participants and beneficiaries regarding the alternative design changes being considered. (U.S. Department of Labor, Employee Benefits Security Administration)
Comments: DOL Posts Opinion Letters Pertaining to FMLA: One Letter Addresses Temps
Excerpt: "Recently, the DOL posted on its website ... a number of opinion letters pertaining to issues connected with the Family and Medical Leave Act (FMLA). With the rising popularity of temps in the workforce, employers will want to take notice of the opinion letter issued April 4, 2004 ... which addresses the issue of which individuals are counted toward the FMLA's '50 or more employees' coverage test.' (Attorney B. Janell Grenier via BenefitsBlog.com)
Survey on Gender Policies at Work
Excerpt: "The Human Rights Campaign, a Washington-based g.ay advocacy group, issues an annual report card on how corporate America treats its g.ay, les.bian, bise.xual and transgender employees. Companies were ranked for the third annual list by seven criteria ...." (The Washington Post via Houston Chronicle)
Overview: the Changing Landscape of Nonqualified Deferred Compensation Plans (PDF)
5 pages. Excerpt: "The Jobs Act applies to any plan that 'provides for the deferral of compensation' and includes excess benefit, supplemental executive retirement, change in control, and any other arrangement that defers compensation, including arrangements covering only one person. As mentioned earlier, it appears that the Jobs Act will apply to SARs, phantom stock, and restricted stock." (Jenkens & Gilchrist)
Overview: Nonqualified Deferred Compensation Reform Requires Immediate Action
This overview provides a summary of the NQDC reforms, an analysis of the implications for employers and what's next for employers, and asks, 'Will NQDC survive?" (Mercer Human Resource Consulting)
Overview: Final Incentive Stock Option Regulations (PDF)
2 pages. Excerpt: "After twenty years, the Internal Revenue Service has issued new final rules providing guidance on incentive stock options ('ISOs'). The Final Regulations generally were effective on August 3, 2004, but certain transition rules are available for existing ISOs and those granted prior to 2006. After December 31, 2005, all ISOs must comply with these Final Regulations." (Haynes and Boone, LLP)
The Society of Actuaries Publishes a Financial Economics Resources Listing
Excerpt: "Financial economics is influencing the way financial professionals view shareholder risk, including the risk from pension plans. Actuaries and others have been examining what place financial economics might have in the actuarial paradigm. The Task Force on Financial Economics and the Actuarial Model has compiled the following resources as an informational tool only to aid actuaries in learning more about the issues." (Society of Actuaries)
Newly Posted Events
14th Annual Reception and Benefits Update
in New Jersey on November 11, 2004
presented by Worldwide Employee Benefits Network (WEB)
Nonqualified Plans - Understanding the New Law
Nationwide on December 16, 2004
presented by SunGard Corbel
Labor Department's New York Office Sponsors Seminar To Help Plan Professionals Comply With Federal Employee Benefits Law
in New York on December 3, 2004
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Newly Posted or Renewed Job Openings
Defined Benefit Implementation Specialists
for Constantin Control Associates
in IL, KY, NC, NJ, TX
Retirement Plan Sales Consultant
for Invesmart, Inc.
in CT, IL, MA, MD, ME, MI, NH, NY, OH, RI, TX, VA, WI
Senior DC Tiered Plan Administrator
for The Pension Group, Inc.
in CA
Senior Manager - ERISA Compliance
for Bank of America
in MA
401(k) Client Relationship Manager
for Financial Service Leader
in CT
Defined Contribution Plan Administration
for Kibble & Prentice
in WA
Service Delivery Manager
for Hewitt Associates LLC
in ANY STATE
Pension Proposal & Installation Specialist
for CUNA Mutual Group
in WI
Handy Links:
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- Using the Web for Employee Benefits Research
- Employee Benefits Library
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