| BenefitsLink Retirement Plans Newsletter |   |
November 10, 2004
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IRS Audits Bank of America's Retirement Programs: Pension and 401(k) Plans Being Examined
Excerpt: "The Internal Revenue Service is auditing the 1998 and 1999 tax returns of Bank of America Corp.'s pension and 401(k) plans, which have been the target of a recent class-action employee lawsuit. The IRS is reviewing whether the transfer of millions of dollars in employee assets to the company's pension plan from its 401(k) plan was lawful, the Charlotte bank said in a regulatory filing Tuesday." (Tallahassee Democrat)
DOL's Amicus Brief In Re Schering-Plough Corporation ERISA Litigation
Excerpt: "Statement of Issue: Whether participants in a defined contribution pension plan have standing to sue plan fiduciaries under sections 409(a) and 502(a)(2) of the Employee Retirement Income Security Act ('ERISA'), 29 U.S.C. §§ 1109(a) and 1132(a)(2), to recover losses sustained by the plan as a result of fiduciary breaches, where such losses will be allocated to individual accounts within the defined contribution plan." (U.S. Department of Labor, Office of the Solicitor)
The Airlines' New Solution to Pension Costs
Excerpt: "UAL's United Airlines plan to dump $6 billion to $8 billion in pension liabilities could trigger a cascade of airline bankruptcies. Strange as it seems, all eyes are on UAL's ... Chief Executive Glenn Tilton. United's pensions, legacies from when the airline was a regulated carrier are a big drain on cash. Pension costs, including curtailment charges, amounted to $693 million last year. Dumping the pension expense in bankrup.tcy greatly alters the carrier's cost structure." (Forbes.com)
Required Minimum Distribution Statements: Will IRA Owners Take the Correct Amounts?
Excerpt: "Required minimum distribution (RMD) season--the last few months of the year when most IRA owners take their required minimum distributions. It should be simpler for everyone involved now that IRA custodians/trustees report RMD information, and often the amount, to their IRA owners. While that is true in many cases, Internal Revenue Service (IRS) Notice 2002-27, which provides the rules for RMD statements, leaves room for error.' (Bankers Systems, Inc.)
Financial Regulation: Industry Changes Prompt Need to Reconsider U.S. Regulatory Structure
173 pages. Excerpt: "The strength and vitality of the U.S. financial services industry demonstrate that the regulatory structure has not failed. But some have questioned whether a fragmented regulatory system is appropriate in today's environment, particularly with large, complex firms managing their risks on a consolidated basis.' Highlights are online at http://www.gao.gov/highlights/d0561high.pdf (U.S. Government Accountability Office)
Opinion: Election Shows the Third Rail Is Dead
Excerpt: "The late House Speaker Thomas 'Tip' O'Neill famously termed Social Security the 'third rail of American politics' because it brought certain death to any candidate who might touch it. .... But President Bush's reelection may finally have turned off the juice to the third rail and opened the way to Social Security reform." (Michael Tanner in the New York Post via Cato Institute)
The Future of Social Security -- Implementation of George W. Bush's Doctrine of Preemption?
Excerpt: "The primary difference between the candidates on whether or not to take preemptive action boiled down to their differing views of the threat that lies ahead. One candidate argued that preemptive and bold action was called for, while the other argued that tinkering and delay would suffice. So, what was the existing intelligence that each candidate relied on to tell them about the threat of an unreformed Social Security system?" (National Review)
Links to Items on Executive Comp, Benefits in General
BLS Study Shows Roughly a Third of Private-Sector Employees Lack Health and Retirement Plans
Excerpt: "Only 60 percent of private-sector workers have access to a retirement plan, while 69 percent have access to employer-sponsored health insurance plans. Those numbers are little changed from last year, according to a survey released Tuesday. The National Compensation Survey, conducted by the Bureau of Labor Statistics, found that 69 percent of private industry employees had access to employer-sponsored health plans in March 2004, with 53 percent of eligible workers participating, ...." (CNNmoney)
Summary: National Compensation Survey: Employee Benefits in U.S. Private Industry, 2004 (PDF)
27 pages. Excerpt: "In addition to presenting data on access to benefit plans, the tables in this release include data on days of paid vacations and holidays, provisions of life insurance plans, and employee contributions to costs of medical care premiums, and the share of costs between employees and employers." (U.S. Bureau of Labor Statistics)
Opinion: Intervention Before Bankrup.tcy -- Force Financially Challenged Firms to Cap Legacy Costs
Excerpt: "There are lots of factors here, not the least of which is chronic global overcapacity in the auto industry. But any fair analysis immediately focuses on 'legacy costs,' the billions of dollars paid by these companies each year for the pensions and health care costs of retirees. Because of increased longevity and waves of successive layoffs, retirees from the Big Three now outnumber active workers by about 2 to 1." (The Washington Post; one-time registration required)
Social Security Numbers: Governments Could Do More to Reduce Their Display
65 pages. Excerpt: "SSNs are ... a key piece of information used for committing identity crimes. The widespread use of SSNs by both the public and private sectors and their display in public records have raised concern over how SSNs might be misused and how they should be protected.' Highlights are online at http://www.gao.gov/highlights/d0559high.pdf (U.S. Government Accountability Office)
Overview: New Tax Law Eases S Corporation Limitations
Excerpt: "The American Jobs Creation Act of 2004 (H.R. 4520) was signed into law on October 22 and contains significant revisions to the Subchapter S rules. These revisions ease eligibility requirements and liberalize certain tax reporting and compliance requirements. The new rules will make it easier for existing small businesses to convert to S corporation status and for new businesses to elect S corporation status." (Buchanan Ingersoll PC)
Analysis: American Jobs Creation Act: Executive Compensation and Employee Benefits Provisions (PDF)
36 pages. Excerpt: "The American Jobs Creation Act of 2004 ... contains several provisions affecting executive compensation and employee benefits. By far the most important of the changes contained in the Act are new statutory rules governing the taxation of nonqualified deferred compensation." (Sutherland Asbill & Brennan LLP)
Text: The Ticking Time Bomb: What State Governments Can Do About Retirement Income Adequacy (PDF)
Pages 1-9. Excerpt: "This article summarizes discussions at two regional meetings held in September 2004 by members of the Reforming States Group about how state governments can most effectively respond to the likelihood that a large number of today's public- and private-sector workers won't be able to afford even a modest standard of living in retirement, particularly if they get hit with major home health or nursing home bills." (Employee Benefit Research Institute)
Newly Posted Events
Benefits Bootcamp
in Ohio on December 1, 2004
presented by Worldwide Employee Benefits Network (WEB) - Cleveland Chapter
Current Issues with 401(k) Plans
Nationwide on December 8, 2004
presented by McKay Hochman Co., Inc.
Newly Posted or Renewed Job Openings
Plan Administrator
for New York Life Investment Management LLC
in MA
Defined Contribution Operations Manager
for New York Life Investment Management LLC
in NJ
Retirement Plan Administrator
for WESPAC
in CA
Client Services Administrator - US Outsourcing
for Mercer Human Resource Consulting
in MA
AVP/Project Manager
for Merrill Lynch
in NJ
Account Manager
for Retirement Service Organization
in NY
Handy Links:
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- Using the Web for Employee Benefits Research
- Employee Benefits Library
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