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December 15, 2004
Today's sponsor: Actuarial Systems Corporation
(Click on company name or banner to learn more.)
ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS ASC provides complete automation for the pension office, including: DC/401(k) and DB administration and valuation systems, sophisticated Compliance Testing, DV Direct Daily Valuation, Advanced Information Manager Database (AIM), and Single-Step Processing. All ASC Technical Support Members were experienced Pension Administrators or Actuaries before joining ASC-- and most have been with ASC for over 10 years.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Text of Notice 2004-84 Providing 2004 Cumulative List of Changes in Plan Qualification Requirements (PDF)
7 pages. Excerpt: "The Internal Revenue Service intends to annually publish a Cumulative List to identify statutory, regulatory and guidance changes that must be taken into account in plan sponsor's submissions to the Service for opinion, advisory and determination letters whose remedial amendment period is proposed to end on January 31 of the second calendar year following release of the list." (Internal Revenue Service)
Text of Proposed Amendment to Class Exemption for Interest-Free Loans to Employee Benefit Plans (PDF)
3 pages. Excerpt: "[T]he Department believes that, with respect to an interest-free loan having a duration of more than three days that is entered into under the class exemption for a purpose incidental to the ordinary operation of a plan, the plan would be adequately protected to the extent that, among other things: no interest or other fee is charged to the plan; no discount for payment in cash is relinquished by the plan; and each loan or extension of credit is unsecured." (U.S. Department of Labor, Employee Benefits Security Administration)
Survey Says 92% of Small Firm Workers Like 401(k) Plans
Excerpt: "Employees at small businesses may value retirement benefits more than their employers realize. Researchers at the Transamerica Center for Retirement Studies, Los Angeles, have published figures supporting that conclusion in a report on a survey of 601 U.S. employers conducted between August and October and a survey of 1,201 U.S. full-time employees conducted around the same time." (National Underwriter)
Proposed IRS Regulations Would Make Major Changes in the 403(b) World (PDF)
Pages 2-20. Excerpt: "The general thrust of the proposed 403(b) regulations is to follow 401(k)-like rules to the extent possible, and to borrow occasionally from the recently finalized 457(b) rules. While this is partly a result of convenience, it also furthers the goal of key tax policymakers to consolidate all tax-favored retirement plans under the largest umbrella – the one covering 401(k) plans – and to help smooth the path for Administration-backed proposed legislation that would ...." (Groom Law Group, Chartered via National Council on Teacher Retirement)
PBGC Interest Rates for Determining Variable Rate Premiums for Years Beginning in December 2004
Excerpt: "The required interest rate for determining the variable-rate premium under part 4006 applies to premium payment years beginning in December 2004. The interest assumptions for performing multiemployer plan valuations following mass withdrawal under part 4281 apply to valuation dates occurring in January 2005." (Pension Benefit Guaranty Corporation)
PBGC Interest Rates for Terminating DB Plans Having January 2005 Valuation Dates
Excerpt: "The Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans prescribe interest assumptions for valuing and paying benefits under terminating single-employer plans. This final rule amends the regulations to adopt interest assumptions for plans with valuation dates in January 2005." (Pension Benefit Guaranty Corporation)
Text of ASPPA Comments on IRS' Proposed Regulation 1.411(d)-3
Excerpt: "These efforts to simplify the application of the Code Section 411(d)(6) 'anti-cutback' rules are a step in the right direction to preserve the defined benefit plan as a viable retirement plan option for employers. Below, ASPPA offers a number of suggestions that it believes will make these rules more effective and easier to apply." (American Society of Pension Professionals and Actuaries)
Overview: Seventh Circuit Changes Mind on Vertical Partial Termination Standard
Excerpt: "More than three years after specifically rejecting the IRS's formula for determining whether a vertical partial termination of a qualified plan has occurred, the Seventh Circuit Court of Appeals has decided it is the 'best available' alternative after all. [See] Matz v. Household International Tax Reduction Investment Plan ..." (Deloitte's Washington Bulletin)
NYSE Corporate Governance Scorecard As of November 30, 2004 (PDF)
17 pages. Excerpt: "This scorecard sets forth a summary of: (a) the requirements under the Final Rules, the Sarbanes-Oxley Act and the SEC Rules with respect to certain board committees, a Company's corporate governance guidelines and a Company's code of business conduct and ethics and (b) certain other requirements and provisions relevant to Companies under the Final Rules, including the new rule regarding shareholder approval of equity compensation plans." (Buchanan Ingersoll PC)
Text: In re Tyco International. Ltd. Multidistrict Litigation (MDL 1335) (PDF)
31 pages. Excerpt: "The named plaintiffs in this class action are participants in retirement plans ('Plans') sponsored by Tyco International (US) Inc. ('Tyco US'). Plaintiffs invoke the Employee Retirement Income Security Act ('ERISA') in asserting breach of fiduciary duty claims against Tyco US, its parent corporation, Tyco International Ltd. ('Tyco International'), the committee that administered the Plans, and several former officers and directors of Tyco US and its parent corporation." (United States District Court for the District of New Hampshire via Jenner & Block)
Opinion: LA County Firefighters' Chief's Disease' Is a Plague Upon Taxpayers
Excerpt: "A firefighter faces great danger and earns the community's respect and admiration by putting his or her life and limb at risk to protect the lives and property of others. That said, it's outrageous that many retiring Los Angeles County firefighters could have gotten away with exploiting the goodwill of the public by scamming the pension and workers' compensation systems -- and how the abuses could have been ignored by county officials and the Board of Supervisors for so long." (Los Angeles Daily News)
Securities Industry Association Supports Individual Social Security Accounts with TSP Model
Excerpt: "Some analysts expressed concern that the introduction of a system of individual accounts will lead to excessive costs and significantly reduce the value of savings for retirees. At the same time, it would generate a 'free lunch' for Wall Street rather than increase the nest egg of the average worker. But Rob Mills, Securities Industry Association (SIA) vice president and director, industry research, said, 'if a new model resembling the Thrift Savings Plan (TSP) is ....'" (Financial-Planning.com)
A Debate on Bush's Social Security Plan
Excerpt: "A two-day conference on the economy hosted by President Bush opens today in Washington, and Social Security is at the top of the agenda. We host a debate on Bush's plan to privatize part of Social Security with independent journalist Eric Laursen and Michael Tanner of the Cato Institute." (Democracy Now!)
Towers Perrin U.S. Legislative Tracking Chart -- Retirement -- December 13, 2004 (PDF)
14 pages. Excerpt: "These charts summarize 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)
Text of ASPPA Comments on Draft of Revenue Procedure for Pre-Approved Plans
Excerpt: "[ASPPA] offers these comments in response to IRS Announcement 2004-33.... Reliance rules should be expanded for adopters of volume submitter plans ... Pre-approved plans with CODA provisions should not be limited to safe-harbor hardship distributions ... A separate approval process for trust agreements should be implemented ... [more]." (American Society of Pension Professionals and Actuaries)
Links to Items on Executive Comp, Benefits in General
What's On Your Calendar For 2005?
Excerpt: "A number of statutory and regulatory changes from 2004 take effect for employee benefit plans in 2005, and employers and plan administrators should be prepared for the modifications necessary to their own plans. Following is a list of the most pressing benefit items to be attended to for 2005, with related links to more detailed information." (Spencer Benefits Reports)
Aon Chart of 2005 Limits for Benefit Plans (Updated) (PDF)
Excerpt: "Our October ... Alert was published soon after IRS and the other federal agencies released their official inflation-adjusted benefit limits in mid-October. That Alert also estimated the inflation-adjusted amounts for income tax brackets, personal exemptions, standard deductions, and similarly adjusted items. In November, IRS released its second wave of official inflation-adjusted items and PBGC updated its maximum guaranteed benefit in December. We have updated our Alert accordingly." (Aon)
Firms Prepare for Complexities of New FASB Financial Reporting Standards for Stock Options
Excerpt: "The FASB gears up for a final ruling that would possibly force companies to recognize the fair value of an employee's stock options. It would require those companies to adopt the fair-based accounting method that requires that compensation costs for awards of share options be measured at their fair value on the date of grant. The goal of FASB's statement No. 123, Accounting for Stock-Based Compensation, is 'to recognize in an entity's financial statements the cost of employee ....'" (The Thompson Corporation and Financial-Planning.com)
Overview: American Jobs Creation Act Has Broad Range over Compensation and Benefits Provisions
Excerpt: "In addition to the highly publicized new rules for nonqualified deferred compensation plans, the American Jobs Creation Act includes several other compensation and benefit provisions. For example, the act excludes incentive stock options (ISOs) and employee stock purchase plans (ESPPs) from the definition of wages for employment tax purposes." (Watson Wyatt Worldwide)
The Internet to Facilitate Enrollment in Benefit Programs: Eligibility Screeners/Online Applications (PDF)
33 pages. Excerpt: "All states have websites that provide information about public benefit programs, including printable application forms for at least some of the major programs. A handful of state websites offer additional features as well, including 'screeners' that help families determine the benefit programs for which they may qualify and applications that can be filled out and submitted online. This paper explores the issues that states need to consider in designing these ...." (Center on Budget and Policy Priorities)
Records Retention: The Legal and Ethical Considerations (PDF)
37 pages. Excerpt: "This paper will review records retention in three parts: (1) an overview of the theory of records retention policy; (2) the impact of the Sarbanes-Oxley Act on records retention obligations and (3) examination of lawsuits where records retention has gone badly. In addition, attached is an example of a retention policy statement." (Haynes and Boone, LLP)
Staying Ahead of the Curve on Outsourcing: Legislative and Human Resource Issues Abound (PDF)
3 pages. Excerpt: "Because offshoring usually accompanies a decrease in the employer's U.S. work force, its effect will generally be to decrease employee benefit costs (U.S. law does not require benefit plan coverage of foreign employees). However, there may be less obvious effects." (GC NEW YORK, New York Law Review via Dechert LLP)
Text of ASPPA Comments on DOL's Proposed USERRA Regulation
Excerpt: "The proposed thirty-day deadline for employer contributions to a retirement plan that are not contingent on employee contributions or elective deferrals is too short.... The proposed deadline for employer contributions to a retirement plan that are derived from employee contributions or elective deferrals needs clarification. [More]" (American Society of Pension Professionals and Actuaries)
Towers Perrin U.S. Legislative Tracking Chart — Human Resources -- December 13, 2004 (PDF)
Excerpt: "These charts summarize 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)
DOL Official Reveals Flaws in Employee Benefit Plan Audits
Excerpt: "Choose your employee benefit plan auditor carefully. That's the upshot of a presentation given by a Department of Labor official at a meeting of the American Institute of Certified Public Accountants in Washington, D.C. [on December 14, 2004]. .... For the DOL's tips on selecting a plan auditor, see http://www.dol.gov/ebsa/publications/selectinganauditor.html." (BenefitNews Connect)
Newly Posted Events
COBRA Compliance for Group Health Plans
in Washington on April 1, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
COBRA Compliance for Group Health Plans
in Washington on April 1, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
ERISA Compliance for Health & Welfare Plans
in Washington on March 31, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
HIPAA Portability, Privacy & Security
in Washington on April 1, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Retiree Health Benefit Survey Release
Nationwide on December 15, 2004
presented by Kaiser Family Foundation
Newly Posted Press Releases
PBGC Urges Bankruptcy Priority For UAL Pension Contributions
(Pension Benefit Guaranty Corporation (PBGC))
New Software Helps Financial Professionals Illustrate Contribution Allocations For Profit-Sharing, SEP, and SARSEP Plans
(GSL Galactic Consulting)
Still River Releases 2005 edition of the 403(b) Contribution Planner (R)
(Still River Retirement Planning Software, Inc.)
Center Announces New Advisory Board Members: Steven Kandarian and Michael Orszag
(Center for Retirement Research at Boston College)
New Workplace Options White Paper Helps Organizations Measure and Manage the Impact of an Aging Workforce
(Workplace Options)
American Express Retirement Services Expands Employee Education Seminars And One-On-One Programs - Workplace Education Curriculum Designed to Address Financial Education Needs of Employees
(American Express Retirement Services)
Newly Posted or Renewed Job Openings
401(k)/Defined Contribution or Defined Benefit Account Manager
for National Retirement Services, Inc. (NRS)
in CA, NC
Conversion Specialist
for The Newport Group
in NC
EB Consultant II - 93345
for Wachovia
in VA
OmniPlus Analysts and Project Managers
for Constantin Control Associates
in NJ
Trust Relationship Officer III (Retirement Plan Services)
for First Citizens Bank
in NC
Pension/401K Wholesaler
for Nationwide, Best of America
in OR, WA
Senior Product Analyst-Retirement Health Services
for ICMA Retirement Corporation
in DC
Handy Links:
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- Search BenefitsLink
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Copyright 2004 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.
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