| BenefitsLink Retirement Plans Newsletter |   |
December 21, 2004
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Analysis: 401(k) Investment Issues: The Fiduciary Duty to Ask for Help
Excerpt: "Fiduciaries are held to the highest legal standard. Where they are unsure of their expertise, fiduciaries must seek the advice of experts and carefully evaluate the advice given. ERISA holds plan fiduciaries to a high legal standard ... the responsibilities of fiduciaries have been described as 'the highest known to the law.' [Donovan v. Bierwirth, 680 F.2d 263, 272 (2d Cir. 1982)] Obviously, not all fiduciaries have the skills needed to satisfy these high standards." (Journal of Pension Benefits via Reish Luftman Reicher & Cohen)
Issue in Brief: Improving 401(k) Investment Performance (PDF)
8 pages. Excerpt: "Public policies toward private pensions reflect a fundamental tension between free choice and paternalism. When people act in their own best interest without harming others, government intervention is unwarranted. But a key motivation for public policies to subsidize retirement saving in the first place is the belief that, without such subsidies, people would fail to act in their own best interest in making saving and investment choices." (Center for Retirement Research at Boston College)
Recovering Economy Poses New Risks for Retirement Plans (PDF)
7 pages. Excerpt: "[A]s you look to managing your company's pension plan through the next economic cycle, what should you focus on? Because it has been a while since plan sponsors have had to deal with a recovery, what can we learn from the past to most effectively move through this next economic phase?" (Argus Consulting)
United Airlines Business Plan Could Fly, Outside Consultant Says
Excerpt: "United Airlines' business model for the future is workable if the company achieves all the savings and employee concessions it has laid out, an outside consulting firm has concluded. United hired Bridge Associates to review its plan -- designed to clear the way for it to exit bankrup.tcy -- at the behest of its machinists' and flight attendants' unions. They asked for the review as part of an agreement to drop legal action against the carrier filed after United stopped ...." (AP via Chicago Sun-Times)
Full Text of Winter 2004 Issue of Employee Plan News Published by IRS (PDF)
15 pages. Articles include: EP Connections with Steven T. Miller; ESOPs, S Corps and 409(p); Follow Up on Form 2848 and Unenrolled Preparers; Cumulative Effect; Phased Retirement; Calling All Callers and E-mailers, Too; Amendments: Caveat Pre-Emptor?; DOL Corner; PBGC Insights; 2004: A Year That Was; The Corner of Forms & Pubs; Web Spins - The Retirement Plans Site; FY 2005 Work Plan; 2005 Los Angeles Benefits Conference. (Internal Revenue Service)
Lifecycle Analysis of Household Wealth Accumulation Study Says Retirement Funds Ample
Excerpt: "The economist who heads the Institute for Research on Poverty at the University of Wisconsin-Madison has an upbeat financial message: More than 80 percent of U.S. households are saving enough for retirement. Many households, in fact, are saving more than they need, according to John Scholz." (Gannett News Service via azcentral.com)
Comments on the FAB Providing Guidance on ERISA Fiduciary Responsibilities of Directed Trustees
Excerpt: "The FAB provides guidance on how directed trustees can satisfy their fiduciary responsibility in avoiding prohibited transactions. The DOL states that the directed trustee 'must follow processes that are designed to avoid prohibited transaction' and can 'satisfy its obligation by obtaining appropriate written representations from the directing fiduciary that the plan maintains and follows procedures for identifying prohibited transactions and, if prohibited, identifying the ....'" (Attorney B. Janell Grenier via BenefitsBlog.com)
Social Security Administration Issues Form 1945 (PDF)
The form, Statement Concerning Your Employment in a Job Not Covered by Social Security, is to be given to employees of state or local governments that do not pay Social Security taxes. It explains the extent to which the Windfall Elimination Provision and the Government Pension Offset Provision apply to employees in this situation, potentially reducing their ultimate Social Security benefits. (Social Security Administration)
When a Fiduciary is In Rome ... He Makes Social Investments Like the Romans Do? A Toolkit
Excerpt: "Eurosif is proud to present the first European toolkit designed to help interested pension fund trustees and other readers understand how to make Socially Responsible Investment (SRI) an integrated part of institutional fund portfolios. The Toolkit is based on research conducted in ten European countries during 2004, examining current best practice, field leadership and ongoing trends." (European Social Investment Forum)
The Great American Retirement Quiz
Excerpt: "Few classes ... and even fewer experiences teach people the particulars: the details about finances, health, work and leisure that make up retirement today. With that in mind, we offer the following quiz. There is no score, no passing grade. (Although there is a bonus question. What's a test without a bonus question?) Rather, these 40 questions and the accompanying answers are designed to highlight some of the most important issues in retirement -- and perhaps make the next big ...." (Wall Street Journal via SFGate.com)
Opinion: Twelve Reasons Why Privatizing Social Security is a Bad Idea
Excerpt: "Addressing Social Security's potential long-term financing challenges by taking the dramatic step of diverting its payroll taxes to create new personal accounts will have drastic consequences for federal finances, future retirees, and those who rely on the system the most. Learn more about twelve major reasons why less costly and less painful reforms should be considered instead." (Century Foundation)
Opinion: Lessons of the Mutual Fund Scandals
See 2nd article at target page. Excerpt: "Based upon my experience, I can assure you that no pension in America -- -not even the largest--has procedures in place to effectively guard against fraudulent activity. The greatest threat to pensions today is the widespread unwillingness to confront the truth about how investment firms have profited at the expense of funds and take corrective action." (Edward Siedle via Benchmark Advisory Services, Inc., and Benchmark Financial Services, Inc.)
Opinion: A Defense of Private Social Security Accounts
Excerpt: "NPR's Robert Siegel talks with the Brookings Institution's Bill Frenzell, an advocate of the president's plan to privatize Social Security. Frenzell is a former Republican congressman from Minnesota and also sat on the president's commission to strengthen Social Security." (All Things Considered via National Public Radio)
Wall Street Lobby Quietly Tackles Social Security Reform
Excerpt: "As President Bush prepares to disclose the details of his plan to funnel hundreds of billions of dollars of future Social Security funds into privately held investment accounts, Wall Street has begun a muted lobbying campaign, chastened by bolder forays that failed in years past." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Text of December 21, 2004 Update to IRS Priority Guidance Plan for 2004-2005 (PDF)
34 pages. (Internal Revenue Service)
Text of Final Reg on Practice Before the IRS (Circular 230) (PDF)
27 pages. Excerpt: "These final regulations set forth best practices for tax advisors providing advice to taxpayers relating to Federal tax issues or submissions to the IRS. These final regulations also provide standards for covered opinions and other written advice." (Internal Revenue Service)
Overview: FASB Issues Final Statement on Accounting for Share-Based Payment (PDF)
2 pages. Excerpt: "The Financial Accounting Standards Board (FASB) on December 16, 2004 approved unanimously and issued on schedule its final statement on accounting for equity compensation, referred to as 'Statement 123(R), Share-Based Payment.'" (Frederic W. Cook)
Overview: FASB Requires Expensing of Stock-Based Compensation (PDF)
2 pages. Excerpt: "The Financial Accounting Standards Board (FASB) issued a revised Statement 123, implementing the controversial requirement to recognize the value of share-based compensation (e.g., stock options) as an expense in a company's financial statements. Milliman's Client Action Bulletin 04-24R examines the implications of the FASB's new rule for publicly traded companies that sponsor stock-based compensation programs." (Milliman)
Amendment to IAS 19 Employee Benefits — Actuarial Gains and Losses, Group Plans and Disclosures (PDF)
47 pages. Excerpt: "This amendment to IAS 19 Employee Benefits introduces an additional recognition option for actuarial gains and losses arising in post-employment defined benefit plans." (International Accounting Standards Board via Mercer Human Resource Consulting)
Buying a Benefits Service Business: 7 Steps to Success
Excerpt: "While acquisitions appear to be done for a variety of reasons, they are all basically strategic or financial in nature. Strategic acquisitions are designed to help an organization meet its long-term business objectives. These typically arise out of planning sessions in which the company looks at its business and concludes that it cannot reach certain business goals without doing x or y." (The McHenry Group)
Executive Pay Rules in Transition: Treasury, IRS to Issue Guidance Through '05
Excerpt: "The Treasury Department and Internal Revenue Service yesterday gave some breathing room to companies that will be forced to restructure their executive pay plans to comply with new restrictions on deferred compensation that Congress enacted this fall. The agencies, in the first of what they said will be a series of 'guidance' notices, designated all of 2005 as a transition period during which companies and executives will not be penalized if their pay plans follow a good-faith ...." (The Washington Post; one-time registration required)
Hewitt Federal Legislation Quick Guide Updated December 7, 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)
USERRA Did Not Entitle Employees To Benefits While On Weekend Duty
Excerpt: "The Uniformed Services Employment and Reemployment Rights Act (USERRA) did not entitle a group of firefighters and paramedics to compensation for lost wages and benefits during the period when they were on duty with the Reserves and the National Guard. This was the decision of the Fifth Circuit U.S. Court of Appeals in Rogers, et al. v. City of San Antonio (No. 03-50588)." (Spencer Benefits Reports)
Newly Posted Events
Advanced IRAs 2005
in California on February 2, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in Alabama on February 2, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in Louisiana on February 4, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in California on February 4, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in Maryland on February 9, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in District of Columbia on February 11, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in Hawaii on February 16, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in Massachusetts on February 16, 2005
presented by BISYS Retirement Services
Advanced IRAs 2005
in California on February 18, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in California on February 1, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in Alabama on February 1, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in Louisiana on February 3, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in California on February 3, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in Maryland on February 8, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in District of Columbia on February 10, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in Massachusetts on February 15, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in Hawaii on February 15, 2005
presented by BISYS Retirement Services
Basic IRAs 2005
in California on February 17, 2005
presented by BISYS Retirement Services
Medicare Modernization in a Polarized Environment: Facing the Challenges
in District of Columbia on January 27, 2005
presented by National Academy of Social Insurance
Update on Same-Sex Marriages in Massachusetts and the Impact on Employee Benefit Plans
in Massachusetts on January 19, 2005
presented by Worldwide Employee Benefits Network (WEB)
Newly Posted Press Releases
Statement Of PBGC Executive Director Bradley Belt On Agreement Between UAL And ALPA
(Pension Benefit Guaranty Corporation (PBGC))
IRS and the Treasury Department Amend Circular 230 to Promote Ethical Practice by Tax Professionals
(Internal Revenue Service (IRS))
Labor Department Publishes 2004 Form M-1 For Multiple Employer Welfare Arrangements -- Online Filing Is Available
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Treasury and IRS Issue Guidance on Deferred Compensation
(U.S. Department of Treasury)
First and Second Combined Quarterly Update of the 2004 - 2005 Priority Guidance Plan
(U.S. Department of Treasury)
Holiday Season? Try Fraudulent Season. Legal insurance from ARAG provides identity theft and fraud resolution
(ARAG)
Newly Posted or Renewed Job Openings
Pension Administrator
for Benetech, Inc.
in AZ, CA
Regional Director
for U.S. Department of Labor, Employee Benefits Security Administration
in NY
Relationship Manager
for MassMutual Financial Group
in CA
Relationship Associate
for Reliance Trust Company
in GA
DB Benefits Operations Manager
for Hewitt Associates
in IL
DB Benefits Service Manager
for Hewitt Associates
in IL
Handy Links:
- View Today's Active Message Threads
- 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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