| BenefitsLink Retirement Plans Newsletter |   |
November 12, 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)
Cigna Loses in Case on Change in an Older Employee's Pension to Cash Balance Pension Plan
Excerpt: "A federal appeals court ruled Wednesday that Cigna Corp. had wrongly forced an older employee to switch to a cash-balance pension plan, a move that reduced his pension significantly. The court, reversing a lower-court decision in favor of Cigna, ruled that the company had adopted a rule that retroactively prevented certain long-service employees from qualifying for a 'grandfather' clause, which would have allowed them to remain under the older, more-generous pension formula." (Wall Street Journal)
Cash Extractions: Best Approaches to Drawing Down Retirement Accounts
Excerpt: "It's an age-old question for Americans needing to draw money from their retirement accounts: Should I take dividends or interest income, sell stocks or bonds or tap taxable or tax-deferred accounts? .... Fortunately, there's a hierarchy to withdrawing assets from taxable and tax-deferred accounts during retirement, based on a few general assumptions. .... Assuming you know how much money you need to live on, you plan to withdraw no more than 4 percent a year ...." (CBS MarketWatch)
Museum on Web Will Teach Economics and All About Insurance, Social Security, Pensions and Money
Excerpt: "Almost four years ago, Shubik and several colleagues created the online Museum of Money and Financial Institutions in an effort to increase economic literacy for children and adults alike. This Internet museum, at www.museumofmoney.org, was the first step in a project that calls for the development of a traveling exhibit about economics, and eventually the construction of a bricks-and-mortar museum in Manhattan on the floor of the New York Stock Exchange." (Yale Daily News)
Opinion: As Baby Boom Ages, Era of Guaranteed Retirement Income Fades
Excerpt: "What is at stake is a reversal of perhaps the most important economic trend in developed countries since World War II, that of guaranteeing financial security for their citizens. In most major countries, governments came to provide health care and an assured pension. In the United States, some of that came from employer-financed health care and pension plans, but the results were often similar." (The New York Times; one-time registration required)
IRS Issues Warning on Discriminatory Hiring Practices and Plan Designs
Excerpt: "In a recent internal memo, Carol Gold, Director Employee Plans, has directed IRS personnel to scrutinize certain potentially discriminatory plan designs and hiring practices. Although the memo examples describe cross-tested defined contribution plans, the IRS analysis applies to other plans with characteristics similar to those the memo describes. This memo is causing considerable concern among benefit practitioners because of the uncertainty it creates in applying ...." (SunGard Corbel)
Comments on Compliance Traps for the Unwary: Joint and Survivor Spousal Consent
Excerpt: "The IRS has announced that, in each issue of its quarterly 'Retirement News for Employers,' there will be a column on a 'common mistake that happens in retirement plans.' .... The first mistake that is being showcased in its Fall 2004 Issue is the problem of distribution to a participant of a benefit 'in a form other than the required Qualified Joint and Survivor Annuity (e.g., a single lump sum) without securing proper consent from the spouse.'" (Attorney B. Janell Grenier via BenefitsBlog.com)
Towers Perrin's Capital Market Update Shows Little Change in Funded Ratio in October 2004 (PDF)
4 pages. Excerpt: "October results included strong equity returns, accompanied by a continuing decline in long bond yields. The effects were mostly offsetting, as the funded ratio for our benchmark plan dropped by 0.2 percentage points for the month. However, October's funded ratio of 81.6% represents a 3.6 percentage point decline from the 85.2% funded ratio at the start of the year." (Towers Perrin)
The Securities and Exchange Commission Posts Proposed Rule: 'Securities Offering Reform'
Excerpt: "Weighing in at 389 pages, the proposal has already been referred to by some as a 'PT Boat' versus the SEC's earlier attempt at comprehensive securities offering reform in 1998, referred to as the 'Aircraft Carrier'. The proposal is at http://www.sec.gov/rules/proposed/33-8501.pdf. .... The comment deadline on the proposed rule is January 31, 2005." (Financial Executives International)
Schwab Advocates Means-Testing for Social Security Benefits
Excerpt: "Charles Schwab, chief executive of the investment firm that bears his name, says it's time to apply a means test to Social Security benefits. Schwab, 67, ... said in an interview Wednesday that Social Security should be an income insurance program for retirees in need. Currently, all Americans who pay premiums into the Social Security system during their working lives can claim retirement benefits, regardless of their wealth." (Chicago Tribune; one-time registration required)
AARP Opposes Bush Plan to Partially Fund Social Security with Private Accounts
Excerpt: "Gearing up for battle over the future of Social Security, AARP, the influential lobby for older Americans, said Thursday that it opposed President Bush's plan to divert some payroll taxes into private retirement accounts. But it supports new incentives for private accounts that supplement Social Security. Working closely with Congress and the White House, [L]awmakers said Congress was unlikely to make major changes in Social Security over the organization's objections." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
SEC Probe Examines Referrals Between Marsh Business Units that May Impact Employee Benefits
Excerpt: "In another sign that the ongoing probes into the insurance industry may impact employee benefits, Marsh & McLennan Companies Inc. disclosed that the Securities and Exchange Commission is investigating possible conflicts related to business referrals between subsidiaries Putnam Investments and Mercer Investment Consulting." (BenefitNews Connect via BenefitNews.com)
G.ay Marriage Ban Could Block Michigan State Employee Benefits for Domestic Partners
Excerpt: "Benefits for g.ay state employees would be extended to their domestic partners in proposed contracts with five unions, but could be denied under a newly approved constitutional amendment banning g.ay marriage." (AP via ClickOnDetroit)
Hewitt Federal Legislation Quick Guide Updated November 9, 2004
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates)
Retiree Was Not Entitled to Subsequently-Offered Early Retirement Package According to Court
Excerpt: "A retirement and welfare benefit plan participant who took early retirement was not entitled to benefits from a severance package offered by his former employer six weeks later because the severance package was a separate plan, as opposed to an amendment to the employer's existing retirement plan, according to a U.S. Court of Appeals in Chicago (CA-7)." (CCH Pension & Benefits News)
Full Text of U.K.'s Inflation Report, November 2004 Edition, Notes Older Workers Return to Workforce (PDF)
Page 29 of 62 pages. Excerpt: "There are good reasons to believe that there has been an increase in the supply of older workers, at least in the recent past. The sharp fall in equity prices from late 2000 to early 2003 reduced the expected pension income of those in defined contribution schemes, and individuals' stock of wealth more generally. Earlier declines in annuity rates, which determine the annual income that a given stock of wealth can purchase, could also have affected expected ...." (Bank of England)
UK House of Commons Passes Civil Partnership Bill
Excerpt: "The House of Commons Tuesday night passed legislation giving same-sex couples many of the same rights as married couples have. The bill would create a civil partner registry. G.ay couples would have inheritance rights to their partners' estates, hospital visitation rights, and the right to receive the spouses share of their partner's pension." (G.ayWired.com)
Newly Posted Press Releases
BenefitsLink Congratulates Ilene Ferenczy on the Opening of Her Law Office
(BenefitsLink.com, Inc.)
Newly Posted or Renewed Job Openings
Actuarial Associate- Retirement
for Towers Perrin
in CT, DC, GA, MA, NJ, NY, PA
Director of Employee Benefits
for Wesleyan University
in CT
DC Administrator
for Northwest Benefit Consultants, Inc.
in IL
Employee Benefits Plan Administrator
for Clifton Gunderson, LLP
in IL
Sr. Retirement Administrator
for JM Family Enterprises, Inc.
in FL
Benefit Analyst
for Kibble & Prentice
in WA
Business Analysts
for Pyramid Digital Solutions
in AL
Data Service Manager
for Hewitt Associates
in IL
Implementation/Transition Manager
for Hewitt Associates
in IL
DC Practice Leader
for Hewitt Associates
in NJ
Conversion Specialist
for The Newport Group
in NC
Health Management Project Manager
for Hewitt Associates
in NJ
Defined Benefits Ongoing Project Mngr
for Hewitt Associates
in CT
Benefit Plan Consultant
for Hewitt Associates
in FL
H&GB Ongoing Project Manager
for Hewitt Associates
in FL
Head of Pricing
for ING US Financial Services
in CT
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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.
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Editor and Publisher: David Rhett Baker, J.D.
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