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November 9, 2004
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Text of Proposed Regulations on Distribution from Retirement Plans Due to 'Phased Retirement' (PDF)
36 pages. Excerpt: "These proposed regulations provide rules permitting distributions to be made from a pension plan under a phased retirement program and set forth requirements for a bona fide phased retirement program." (Internal Revenue Service)
Private Sector Retirement Plan Minefields: Fiduciaries Might Face Lawsuits on "Extra" Fees
Excerpt: "If you're a 401(k) plan fiduciary, make sure you understand the extra fees you're paying -- before it's too late! ... In order to satisfy their fiduciary duty to control fees and expenses inside their 401(k) plans, plan fiduciaries that use Group Annuity Retirement Plans should assess whether these extra fees are reasonable in light of the many alternatives currently available. This, however, won't be easy." (Pittsburgh Post-Gazette)
Solo 401(k)s Now Offer More Choices and Lower Costs
Excerpt: "The good news for financial advisers considering a solo 401(k) for clients is that it has become a buyers' market. Increased competition among plan providers has made for more choices and lower costs, with some plans now under $100 a year to set up and maintain, said Rick Meigs, president of the 401khelpcenter.com LLC in Portland, Ore." (Investment News)
Cash Balance Plan Critics Say Pension Conversion Problems Could Cause Upheaval
Excerpt: "While International Business Machines Corp. agreed to pay $300 million in partial settlement of claims that it improperly converted to a cash-balance pension plan, critics of this lawsuit and similar ones fear an appeals court ruling declaring such conversion formulas discriminatory could result in the wholesale rejection of pensions by large employers. The partial settlement of the age-discrimination case ... was announced at the end of September." (Human Resource Executive)
Social Security Administration Issues Benefit Bend Points for 2005
Excerpt: "The Social Security Administration (SSA) has issued 'bend points ' for use in computing the benefits of employees who become eligible for benefits in 2005 and in computing maximum family benefits. The bend points used in the computation of benefits for workers who first become eligible in 2005, or who die before becoming eligible, will be $627 and $3,779 for purposes of determining the primary insurance amount (PIA) under the average indexed money earnings (AIME) formula." (CCH Pension & Benefits News)
Employee Benefit Practitioner's Forum Discussion on IRS Announcement 2004-71
Excerpt: "The following is the transcript of an informal discussion of employee benefit practitioners held in Washington, D.C. on October 6, 2004. The topic centers on the IRS's release of a proposed revenue procedure that would significantly change the process for obtaining favorable determination letters on tax-qualified retirement plans. Discussion Participants: Stuart M. Lewis ... Dan S. Brandenburg ... Anne E. Moran ... C. Frederick Oliphant, III" (BNA's Tax Management Inc)
Technical Tip: Question & Answer on Definitely Determinable Allocation Groups
Excerpt: "The following question and answer were from the IRS Q&A Session at the 2003 ASPA Annual Conference: A profit sharing plan provides that the discretionary employer contribution is to be allocated among the members of each allocation group proportionately based on the ratio of each participant's compensation to the compensation of all participants who are in the allocation group. Each individual participant is his or her own allocation group.' [Three-part question with answer is posted.] (Reish Luftman Reicher & Cohen)
Full Text of Paper: Revenue Sharing Aspects of Qualified Retirement Plan Management (PDF)
14 pages. Excerpt: "Today, it's imperative that executives charged with fiduciary oversight of an organization's retirement or savings plan understand the distribution systems that investment management organizations use.... Consolidation means fewer firms, more brands, and a growing focus on investment management distribution through retirement plan products and service providers. This fierce competition ... has resulted in revenue sharing and a 'pay to play' mentality." (Unified Trust Company)
Pension Issues Are on Senate Finance Committee's Priority List, Says Grassley
Excerpt: "Proposals dealing with pensions and retirement savings will be among the priority items for the Senate Finance Committee in the next Congress, according to Sen. Chuck Grassley (R-IA) in a memorandum released to the press on November 3, 2004. Grassley, current Finance Committee Chairman, is expected to resume the chairmanship of the Committee when the new Congress convenes next year." (CCH Pension & Benefits News)
AARP Pushes Social Security Changes Other Than Private Accounts Idea
Excerpt: "Social Security reform is on the way. At least, that's the word from the experts who spoke at a forum held at the Friday Center on Monday. Bill Novelli, the chief executive officer of AARP, the nation's largest organized group for senior citizens, said the battle over the future of Social Security is on the horizon. 'People have heard that Social Security is in trouble,' Novelli said. 'The whole set of issues is rising to the surface.'" (The Herald-Sun)
A DALBAR Letter to America - Practical Solutions to Social Security Reform
Excerpt: "The following is the full text of a statement by DALBAR's President, Louis Harvey.... Two minor alterations will start a process that leads to long-term solvency without exorbitant expenditures and maintaining funding of current needs. The first alteration is to permit employees to voluntarily forego their future Social Security benefits in exchange for putting 20% of their Social Security payments ... into their existing personal 401(k), IRA, or other retirement plan." (Forbes.com)
Which Is Better? Social Security Benefits at Age 62 or at Full Retirement Age?
Excerpt: "If you retire before reaching full Social Security retirement age, you must decide whether to take an early retirement benefit or wait until you can take a higher benefit at your full retirement age. This decision will depend on your personal situation at the time it must be made. By answering a few pertinent questions regarding this issue, your choice should become easier to make." (The Motley Fool)
Links to Items on Executive Comp, Benefits in General
Revised November 2004 -- National Compensation Survey: Employee Benefits in U.S. Private Industry (PDF)
17 pages. Excerpt: "The 2003 NCS benefits survey obtained data from 2,924 private industry establishments, representing nearly 102.2 million workers; of this number, nearly 79 million were full time workers and the remainder--slightly more than 24 million--were part-time workers. The NCS uses the establishment's definition of full- and part-time status to classify workers." (U.S. Department of Labor, Bureau of Labor Statistics)
Overview: American Jobs Creation Act of 2004 Limits the Deductibility of Entertainment Expenses
Excerpt: "Section 907 of the American Jobs Creation Act of 2004 (AJCA), which was signed by the President on October 22, 2004, has overturned the favorable result in Sutherland Lumber-Southwest Inc. v. Comr.... (2000), and in CCA 200344008, both of which permitted the full amount of employer provided air travel expenses to be deducted under §274(e) so long as the corresponding compensation income was included by employees (for the value of the air travel benefit received by them)." (BNA's Tax Management Inc)
Possible Lineups for Committee Chairmen in the Next Congress
Excerpt: "Possible lineups for House and Senate committee chairmen in the next Congress now that Republicans have expanded their majorities in both chambers." (AP via SFGate.com)
Senate Committee Chairmanships Set to Change -- Possible Effects on Social Policies
Excerpt: "[T]he elections coincide with turnover among Senate committees under relatively new rules ... Sen. Thad Cochran of Mississippi, for example, already is slated to take over the Senate Appropriations Committee, and if Gregg were to take the Budget Committee chairmanship as now expected, Sen. Michael Enzi, a Wyoming accountant with an interest in pension legislation, would likely succeed him as chairman of the Senate Health, Education, Labor and Pensions Committee." (Wall Street Journal via Seacoast Online)
Judge Rules New York City's Bloomberg Must Carry Out Equal Benefits Law He Vetoed
Excerpt: "State Supreme Court justice ruled yesterday that the administration of Mayor Michael R. Bloomberg must carry out a law requiring companies that do business with the city to extend the same benefits to employees' domestic partners that they provide to spouses. The city had vigorously fought the Equal Benefits Law, arguing it would prove costly to taxpayers because it would limit its ability to select low-cost bidders for city work." (The New York Times; one-time registration required)
Opinion from Steve Forbes: Sweeping Changes Ahead in Social Programs and Tax Code
Excerpt: "Steve Forbes ... sees some major changes in Medicare, Social Security, Federal tax code and personal savings accounts with the re-election of President Bush and the increase in the Republican majority controlling Congress.... Individuals should expect to be given a choice between Medicare or new health care savings accounts (HSA).... Initially a hybrid system would exist, consisting of both programs, as Medicare is phased out." (The City Paper, LLC)
Opinion: the Risk Society or the Ownership Society? Social Insurance Plans Could Be Dismantled
Excerpt: "[W]hat the President has in mind is nothing less than a radical overhaul of America's entire system of social insurance. In place of unwieldy government programs run by busybody bureaucrats, Bush wants Americans to have more independence and more choices regarding their health care, their savings, and their retirement. Social Security would be partially privatized, with people allowed to put aside money in individual accounts. Private health-insurance plans would compete ..." (The New Yorker)
Newly Posted Press Releases
ICC Plan Solutions Now Offers Print-On-Demand Enrollment Books with Binding
(Metrics Partners)
American Express® Individual(k) Introduced for Small Business Owners
(American Express Retirement Services)
American Express Adds New Stock Option Education Feature To Executive Financial Education Program
(American Express Retirement Services)
Plan Sponsors and Participants Gain Advantage with Latest CPI Internet Enhancements
(CPI Qualified Plan Consultants, Inc.)
Newly Posted or Renewed Job Openings
Director - Client Investment Services
for Diversified Investment Advisors
in ANY STATE
Client and Participant Services Manager - US Outsourcing
for Mercer Human Resource Consulting
in MA
Team Leader - US Outsourcing
for Mercer Human Resource Consulting
in MA
Data Consultant
for Fidelity Investments
in MA
Account Executive
for Transamerica
in PA
Benefits Manager
for Providian Financial
in CA
Pension Administrator
for Actuaries Unlimited, Inc.
in CA, NV
Senior Special Projects Actuary
for Nyhart
in IN
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