| BenefitsLink Retirement Plans Newsletter |   |
November 17, 2004
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Automatic Rollover Rules - Vendor Survey & Alternatives for Plan Sponsors
Excerpt: "As we reported last month, beginning March 28, 2005, retirement plan sponsors will be required to implement automatic rollovers of mandatory cashouts between $1,000 and $5,000, unless the participant directs otherwise.... Mercer sent an informal e-mail survey to 22 major providers to determine the extent to which they plan to offer automatic rollover services. Initial results of the survey include responses from 12 organizations." (The Washington Resource Group of Mercer Human Resource Consulting)
ASPA Changes Name to American Society of Pension Professionals & Actuaries (ASPPA)
Excerpt: "ASPPA was founded in 1966 originally as an actuarial organization. Since then, ASPPA has carefully tracked the changing needs of the retirement plan industry. As a result, ASPPA has expanded and diversified its membership to include all types of pension professionals--from actuaries, consultants, and administrators to insurance professionals, financial planners, accountants, attorneys, and human resource managers.' Former name was the American Society of Pension Actuaries. (American Society of Pension Professionals & Actuaries)
Employee Ownership Update for November 16, 2004
NCEO Executive Director Corey Rosen discusses the 2005 dollar limits for qualified plans, a decision by the Financial Standards Accounting Board (FASB) to allow closely held companies to use a simpler valuation method for options, a dismissal of a claim against ESOP fiduciaries in a court case, and how ESOP companies are going on an acquisition binge. (National Center for Employee Ownership)
Comments on Expanding Exclusion from Taxable Income for Lifetime Payments from All Annuities
Excerpt: "It is essential that if Congress grants an exclusion form taxable income for up to 50% of the taxable portion lifetime payments from a nonqualified annuity, that exclusion must be equally available to lifetime payments from qualified annuities and from lifetime annuity payments from a qualified plan." (American Society of Pension Professionals & Actuaries)
IRS Issues Guidance on Deductions Claimed by Corporations for Redemptions of Stock Held By ESOPs
Excerpt: "The Office of the Chief Counsel of the IRS has issued guidance to its attorneys regarding deductions claimed by corporate taxpayers for redemptions of stock held by employee stock ownership plans ... The notice addresses in detail the primary IRS arguments for disallowing deductions for stock redemption payments to an ESOP found in Rev. Rul. 2001-6 ... and also addresses the 2003 Ninth Circuit Court of Appeals decision in Boise Cascade Corporation v. United States of America ..." (CCH Pension & Benefits News)
How to Fix Social Security (draft) by David C. John
Excerpt: "There are only three real solutions to Social Security's rapidly approaching fiscal problems: raising taxes, reducing spending, or making the current payroll taxes work harder by investing them through some form of personal retirement account (PRA). Establishing PRAs is the only solution that will also give future retirees the option to receive an improved retirement standard of living. These accounts would give them more control over how to structure their income and allow them ..." (The Heritage Foundation)
Comments on Social Security Reform
Excerpt: "Please allow me to cut through all the SSBS so we can have an intelligent discussion. Repeat three times after me: my government has no wealth; my government has no wealth; my government has no wealth. Wait a second for that to sink in ... there! Now we can proceed on firm grounds." (What's an Actuary?)
Analysis of Reform Model Two of the President's Commission to Strengthen Social Security
Excerpt: "This analysis uses the Urban Institute's DYNASIM3 model to examine the potential distributional impacts of Model 2 of the President's Commission to Strengthen Social Security. Model 2 would establish a new minimum benefit, provide enhanced widow(er) benefits, and phase out the wage-indexed benefit formula to help restore solvency to the system. Model 2 would also allow workers to divert four percentage points of their payroll taxes (up to $1,000 annually, indexed to wages) ..." (Urban Institute)
What's Ahead for Social Security: Can Proposed Private Accounts Fix the System's Fiscal Troubles?
Excerpt: "Are private accounts the only solution to the Social Security problem? No. If all you want to do is make the system solvent so Washington will have the resources to pay future benefits, you could make ... modest changes. Some ideas: trim cost-of-living increases so they more closely track actual inflation; reduce benefits slightly for those who were high earners; boost the retirement age to better reflect life expectancy; or raise the amount of wage income subject to the payroll tax." (BusinessWeek Online)
Opinion: Why Social Security Is Not in Crisis (PDF)
12 pages. Excerpt: "Opponents of Social Security have been striving to convince American workers, especially young adults, that Social Security will no longer exist by the time they retire. Phrases such as 'imminent crisis' and 'unmanageable costs' lace this rhetoric. To a large extent, this alarmism is voiced by those who are hostile to government and therefore favor replacing all or part of one of this nation's most successful and essential programs with private investment accounts." (The Century Foundation)
Links to Items on Executive Comp, Benefits in General
Overview: Nonqualified Deferred Compensation Plans' Proposals Become Law (PDF)
4 pages. Excerpt: "This new law affects nonqualified deferred compensation plans. It does not apply to qualified plans (such as 401(k) plans), 403(b) plans and programs, section 457(b) plans, Simplified Employee Plans (SEPs), or SIMPLE plans.... The new law defines a 'nonqualified deferred compensation plan' as any plan that provides for the deferral of compensation. This definition includes both plans to which employees make elective contributions, and nonelective plans ..." (Prudential Retirement)
Overview: For Nonqualified Deferred Compensation Plans, It's Back to the Drawing Board
Excerpt: "The restrictions, which are contained in the American Jobs Creation Act of 2004, amount to a broad overhaul of the deferred compensation rules that companies follow in their reward programs for senior executives and other employees, outside directors and independent contractors. If the new requirements are not satisfied, plan participants are subject to accelerated tax on deferred amounts as well as an additional 20% tax and interest on the taxes that would have been paid ..." (Towers Perrin)
Overview: First Proposed Regulations Implementing USERRA
Excerpt: "The proposed regulations discuss rules regarding anti-discrimination and anti-retaliation, eligibility and procedures to assure reemployment and several other protections in USERRA. To a great extent, they simply mirror the law itself. This Compliance Alert highlights the key provisions in the proposed regulations that would add some detail to the rules for employee benefit plans, including some issues of special interest to sponsors of multiemployer plans." (The Segal Company)
State of the Third Party Administrator Industry + Forecast for 2004
Excerpt: "Many envisioned Y2K (or, more precisely 2001) as the start of a new millennium raising the curtain on so much different from the past. I always thought that was just convenient calendaring. Instead, I predict that in our world of employee benefits and health care, 2004/2005 will be the start of probably the biggest change since Medicare in 1965 or Social Security in 1935. It will be a change in the playing field." (Society of Professional Benefit Administrators)
Multinationals Rely More on Corporate HQ and Finance in Managing Global Benefit Programs
Excerpt: "Rising costs and heightened financial uncertainties associated with pensions and other employee benefit programs are leading multinational companies to give greater control of their benefit plans to corporate headquarters while stepping up the involvement of the finance department. These are among the key findings of a ... survey of global benefit management practices at large employers. The survey, which updates a similar study conducted in 2001, drew responses from 134 ..." (Towers Perrin)
Newly Posted Events
A Roadmap to Fiduciary Survival - Managing Fiduciary Liability for Today's DB & DC Plan Sponsor
in Connecticut on November 30, 2004
presented by PLANSPONSOR
DOL and IRS Audits and Initiatives
in Illinois on December 2, 2004
presented by ASPPA Benefits Council of Chicago
ERISA Litigation
in Arizona on February 24, 2005
presented by ALI-ABA (American Law Institute-American Bar Association)
Representing Professional and Closely Held Businesses - Qualified Plans, Welfare Benefits, and Tax Planning
in Arizona on February 17, 2005
presented by ALI-ABA (American Law Institute-American Bar Association)
Newly Posted Press Releases
2005 Standard Mileage Rates Set
(Internal Revenue Service (IRS))
CalPERS Adopts Plan to Tackle Abusive Executive Compensation; System to Target Focused List of Directors, Corporations and Compensation Consulting Industry
(CalPERS (California Public Employees' Retirement System))
Final Settlement Restores $79 Million For Global Crossing Retirement Plans
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
New Industry Index: “The Retirement Index™”
(Foundation for Fiduciary Studies)
Newly Posted or Renewed Job Openings
Tax Staff
for Deloitte
in NC
Tax Senior or light Manager
for Deloitte
in GA, NC
Sales Executive- Group Life and Health
for ULLICO Inc.
in CA
Pension Consultant/Enrolled Actuary
for Chambers Benefit Group, APC
in NM
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