If you'd like to STOP this newsletter, just click on this link: STOP sending this newsletter to me
BenefitsLink
Retirement Plans
Newsletter		To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

December 22, 2004
Today's sponsor: William J. Stecker, CPA

(Click on company name or banner to learn more.) 

A Practical Guide To Substantially Equal Periodic Payments And Internal Revenue Code §72(t)
New 4th edition by William J. Stecker, CPA with all of the updates needed
to reflect the issuance of Revenue Ruling 2002-62 in October, 2002 as well
as all Private Letter Rulings issued subsequently.
This text is a must read for anyone under age 60 who is contemplating
early retirement and has substantial 401(k) or IRA assets. This text
will teach the reader everything they need to know about avoiding the
10% surtax on early withdrawals as defined in IRC 72(t). All computational
methods are covered and how to plan and properly execute substantially
equal periodic payments. This is the definitive text on IRS 72(t) including
more than 190 footnotes citing all of the relevant legal authorities.
Click above to purchase and download now

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Overview: First Staggered Remedial Amendment Period for Pre-Approved DC Plans
Excerpt: "CCH Note: The affected plans must comply with all relevant qualification requirements, not just those delineated on the 2004 Cumulative List. The IRS has further stated that it will not issue plan language for guidance unless the topic appears on the 2004 Cumulative List. Additionally, sponsors of pre-approved plans may not rely on opinion or advisory letters concerning guidance issued after December 14, 2004, unless that guidance is on the 2004 Cumulative List." (CCH Pension & Benefits News)

Question and Answer on Plan Termination and Benefit Accruals
Excerpt: "Technical Tip 135: The following question and answer were from the IRS Q&A Session at the 2003 ASPPA Annual Conference: A money purchase plan has a plan year which is the calendar year. An amendment to terminate the plan is adopted and effective on September 1, 2003. Is a contribution required for the plan year ending December 31, 2003? Does it matter if the plan has a 1,000-hour requirement? How about last day of employment?" (Reish Luftman Reicher & Cohen)

Pensions at Risk: Bankruptcies Strain Agency That Backs Retirement Plans
Excerpt: "'While we were busy tending to our grandkids and playing golf, the corporations put their heads together and figured out how to screw their retirees,' said Norby, who says the retirement security act [ERISA} 'has been decimated' and now has 'all kinds of holes.'" (San Francisco Chronicle)

Overview: PBGC Urges Bankrup.tcy Priority for UAL Pension Contributions
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) filed a brief in bankrup.tcy court on December 10, 2004, in support of a motion by United Airlines' independent pension fiduciary to compel the company to make more than $800 million in required contributions to its pension plans. 'United Airlines' pension debt is a legally binding obligation to its employees,' said Executive Director Bradley Belt." (BNA Pension & Benefits News)

CRS Report: Can the Pension Benefit Guaranty Corporation Be Restored to Financial Health? (PDF)
20 pages. Excerpt: "The doubling of the PBGC deficit from fiscal 2003 to fiscal 2004, has heightened awareness of the PBGC deficit situation. Representative Boehner, ... Senator Gregg, ... Senator Grassley, ... and Senator Baucus, ... are among those that have announced their intention to move aggressively on legislative solutions in the 109th Congress." (Congressional Research Service via The ERISA Industry Committee)

Overview: ERISA Advisory Council Recommends Changes on Retirement Plan Fee Disclosures
Excerpt: "On December 9, 2004, the Department of Labor (DOL) made public the final reports and recommendations of two ERISA Advisory Council working groups that have been studying the reporting and disclosure of retirement plan fees." (Sutherland Asbill & Brennan LLP via BNA Tax Management)

Overview: DOL Addresses Directed Trustee Responsibilities (PDF)
Excerpt: "Field Assistance Bulletin (FAB) 2004-3 was a response to an advisory opinion request filed by Groom Law Group on behalf of several clients. The American Benefits Council sent a letter to the DOL supporting limitations on the duties for directed trustees." (American Benefits Council)

Overview: 2005 IRA Contribution and Deduction Rules
Excerpt: "Thanks to a scheduled increase in the IRA contribution limit, IRA owners can make larger contributions for 2005. In addition, because the modified adjusted gross income (MAGI) limits for determining deductible traditional IRA contributions have increased, more individuals may find that they are eligible for deductible contributions.' (Bankers Systems Retirement Plan Services)

Overview: Changing the Rules on Canadian Defined Benefit Pension Plans
Excerpt: "A recent decision from Can.ada's Supreme Court changes the landscape for companies with defined benefit pension plans. When it upheld the requirement for pension plan surpluses to be distributed in the event of a partial plan wind-up, the Court set the stage for a massive reassessment of pension plan history. Looking forward, Canadian companies will err on the side of running their plans in a deficit position - an unintended outcome of the Court's decision." (Mercer Human Resource Consulting)

A Question of the Iowa Taxation of Pensions and 401(k) Plans
Excerpt: "It is unlikely that Iowa would try to distinguish between pension and 401(k) plans for many reasons, not least of which is that a pension - only exclusion would be ridiculous. If additional pension breaks are enacted, only non-qualified plans run any risk of lost benefits because they are generally directed towards higher-paid employees." (Roth & Company, P.C.)

Audio: Privatizing Social Security and its Effects on African Americans
Excerpt: "NPR's Tony Cox and guests David Certner, director of Federal Affairs for the AARP, and Bob Woodson, president of the National Center for Neighborhood Enterprise, discuss President Bush's plan to privatize Social Security and its potential effect on African-American communities." (NPR News with Tony Cox)

Details Cloud Support for Bush Social Security Plan
Excerpt: "President Bush has wide support for his argument that Social Security needs dramatic change to meet its obligations to future retirees, but there remains considerable skepticism about his plan to let people invest a portion of their contribution to the program in the stock market, according to a Washington Post-ABC News poll." (The Washington Post; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Overview: Amendment Deadline for Nonqualified Deferred Compensation Plans
Excerpt: "As part of the American Jobs Creation Act of 2004 (JOBS), Congress added Code §409A which provides new rules for nonqualified deferred compensation plans. Generally, the new rules apply to deferrals on or after January 1, 2005. Many practitioners were concerned that employers may need to amend their plans by January 1, 2005." (SunGard Corbel)

Comments on and Quotes from WSJ Article on Stock Appreciation Rights and Notice 2005-1
Excerpt: "Businesses won a victory Monday when the Treasury Department agreed to exempt public companies' stock appreciation rights from new restrictions on deferred executive compensation plans. The Treasury and Internal Revenue Service said stock appreciation rights will have 'limited exceptions' from new rules that tighten the tax treatment of deferred compensation programs." (Attorney B. Janell Grenier via BenefitsBlog.com)

Overview: IRS Issues Guidance on Nonqualified Deferred Compensation in Notice 2005-1 (PDF)
5 pages. Excerpt: "Perhaps the most important aspect of the Notice is its provision of various transition rules. Although the statutory effective date for compliance with new Code section 409A is generally January 1, 2005, Treasury and IRS acknowledge in the Notice that more guidance is needed to enable employers to comply fully with the new rules." (Sutherland Asbill & Brennan LLP)

Newly Posted Events

Guidance on the New Deferred Compensation Rules: What to do now that we have Notice 2005-1
in New York on January 13, 2005
presented by Worldwide Employee Benefits Network (WEB)

Newly Posted Press Releases

New Book Recommends Different Way of Thinking about Retirement
(Watson Wyatt)

IRS Warns Businesses and Retirement Plans Against Abuses Involving ESOPs and S Corporations
(Internal Revenue Service (IRS))

Pension Reporter (5500) System from DATAIR – Year 2004 Forms Released
(DATAIR Employee Benefit Systems, Inc.)

Fiduciary Alert – Another Year End: Global Fiduciary Advisors, LLC offers steps for retirement plan sponsors to take to ensure ERISA compliance and avoid unnecessary litigation at year end.
(Global Fiduciary Advisors, LLC.)

Partnership to Assist Small Businesses Launched by Blue Cross and the Small Business Administration
(Blue Cross of California)

Web-based COBRA Software Launches Free Trial Version
(COBRApoint)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

AVP of Retirement Programs
for UnumProvident Corporation
in ME

Account Executive - Cleveland, OH
for Transamerica
in OH

DB Quality Assurance Manager
for Hewitt Associates
in FL

DB Benefits Service Manager
for Hewitt Associates
in FL

HGB Benefits Service Manager
for Hewitt Associates
in FL

401(k) Administrator
for Redwood Administrators, Inc.
in NJ

DC Benefits Operations Manager
for Hewitt Associates
in FL

HGB Benefits Operations Manager
for Hewitt Associates
in FL

Balance Forward Operations Manager
for EMJAY Retirement Services, a Great-West Company
in WI

Retirement Services Regional Sales Directors
for MassMutual Financial Group
in ANY STATE



Handy Links:
Copyright 2004 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

Published by:

BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

Editor and Publisher: David Rhett Baker, J.D.

Housekeeping: