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December 23, 2004
Today's sponsor: Natalie Choate's Life and Death Planning for Retirement Benefits

(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)
IRS Warns 1,700 Businesses and Retirement Plan Sponsors on ESOP Issues
Excerpt: "The Internal Revenue Service has issued letters to approximately 1,700 businesses and retirement plan sponsors alerting them to new income and excise taxes applicable to S corporation employee stock ownership plans (ESOPs) and warning of the consequences of participating in abusive schemes involving ESOPs and S corporations. The letters are being mailed to S corporation ESOPs reporting 10 or fewer participants." (SmartPros Ltd.)

Mellon's HR&IS Issues Survey of Economic Pension Funding Assumptions for the 2003 Plan Year (PDF)
1 page. Excerpt: "Mellon's Human Resources & Investor Solutions has issued its survey on economic assumptions used for funding defined benefit pension plans for the 2003 plan year. The survey also examines other technical issues related to funding pension plans." (Mellon Financial Corporation)

The Quarterly Publication, Enrolled Actuaries Report, Winter 2004 Issue (PDF)
8 pages. Articles include: Revised Enrolled Actuary Regs; Advancing the Principles of Financial Economics; Updated Social Security and IRS Amounts for 2005; Joint Board Regs and the Code of Professional Conduct; and, Symposium of Pension Funding Reform. (American Academy of Actuaries)

Bush Signs YMCA Pension Bill
Excerpt: "President Bush has signed a bill (HR 5365) to treat any retirement plan maintained by the YMCA Retirement Fund as of January 1, 2003, as a church plan under Internal Revenue Code provisions relating to tax-exempt pension and other employee benefit plans. The bill would allow YMCA plans to continue to operate much as they have since 1922, despite the fact that the YMCA is not limited to one church or religious denomination." (Mercer Human Resource Consulting)

Financial Executives International Launches Web-Based ERISA Fiduciary Training
Excerpt: "The course is expected to enhance fiduciary conduct and provide an independent view into fiduciary best practices. The leading professional association of chief financial officers and other senior-level financial executives, Financial Executives International (FEI) has launched an online ERISA fiduciary governance training course designed to offer fiduciaries an in-depth look at corporate executives' fiduciary requirements and responsibilities as they relate to retirement plans." (Financial-Planning.com)

Incoming Chairman of HELP Committee Outlines Pension Priorities for Next Congress
Excerpt: "Sen. Mike Enzi (R-WY), who is expected to be the next chairman of the Health, Education, Labor and Pensions (HELP) Committee pending full Committee approval, has outlined his priorities in the pension and benefits area for the 109th Congress. For instance, Enzi announced his plans for 'closer scrutiny' of the Departments of Health, Education and Labor and the Pension Benefit Guaranty Corporation (PBGC)." (CCH Pension & Benefits News)

ICI President Issues Statement on Social Security Reform, December 2004
Excerpt: "The Institute believes it is imperative to ensure the long-term health of the Social Security system. To this end, ICI commends the Bush Administration's effort to develop and propose appropriate reforms of the system. Along with any Social Security reform, we also should expand private retirement programs and simplify the rules governing them." (Investment Company Institute)

Economic Snapshot of Social Security Private Accounts: The 'Spicy Sauce' to Sell Deep Benefit Cuts
Excerpt: "Like a cafeteria selling a cheap cut of meat by serving it in spicy sauce, proponents of deep cuts in Social Security benefits are masking their sour taste with the artificial sweetener of private accounts. The possible long-term shortfall in the Social Security system as it currently stands would require modest increases in revenue or cuts in benefits. However, the President has stated he will not increase revenues, leaving only benefit cuts to balance the system." (The Economic Policy Institute)

CBO Report: Long-Term Analysis of the Diamond-Orszag Social Security Plan
Target page has links to the report, Supplemental Data, and Supplemental Tables and Figures. Excerpt: "The CBO analysis considers the impact that the proposed plan would have on the Social Security program, the federal budget, the U.S. economy, and present and future beneficiaries." (Congressional Budget Office)

Opinion: The Bottom Line on Overhauling Social Security -- The Benefits
Excerpt: "The Bush privatization plan coming into view would work as follows. Workers now pay to Social Security 6.25 percent of their wages up to $87,900, matched equally by their employer. Workers would be allowed to divert four percentage points, up to a maximum of $1,000 a year, to private investments in stocks and bonds. The investment accounts would be limited to highly diversified mutual funds, or even index funds, and the transactions costs would be kept to a minimal 0.3 percent." (The New York Times; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Heads-Up on Deferred Compensation Guidance issued in Notice 2005-1 (PDF)
5 pages. Excerpt: "The guidance confirms the broad coverage of arrangements considered to provide for the 'deferral of compensation' which are treated as nonqualified deferred compensation plans in addition to traditional deferred compensation plans, including cash-settled stock appreciation rights, discount stock options, supplemental retirement plans and excess retirement plans (i.e., plans providing benefits or contributions in excess of the limits for tax-qualified retirement plans)." (Frederic W. Cook & Co., Inc.)

Overview: Section 409A Guidance Issued (PDF)
5 pages. Excerpt: "Earlier this week, the initial wave of guidance applicable to new Internal Revenue Code section 409A was issued in the form of IRS Notice 2005-1. The initial guidance which is structured as a series of questions and answers focuses upon: (i) what constitutes a nonqualified deferred compensation plan; (ii) the definition of a 'change in control'; (iii) when deferred compensation payments may be accelerated; (iv) transition rules; and (v) reporting and withholding issues." (Dechert LLP)

Overview: DOL Releases First USERRA Guide (PDF)
7 pages. Excerpt: "The DOL's Veterans' Employment and Training division has issued, for the first time, guidance in the form of Q&As governing employers' responsibilities (and employees' rights) under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Employers whose employees enter military service will have to review their obligations under this law and determine whether they have been applying it in accordance with this guidance." (Mellon Financial Corporation)

Newly Posted Events

The Leadership Summit on Innovation in the Cost-Appropriateness of Behavioral Health & Wellness
in Maryland on May 2, 2005
presented by World Congress

Newly Posted Press Releases

Cash Balance Pension Plan Documents from DATAIR
(DATAIR Employee Benefit Systems, Inc.)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Health & Welfare Project Manager
for Hewitt Associates
in NJ

Human Resources Generalist (PEO)
for ADP TotalSource
in CT

Actuarial Assistant
for Hand Benefits & Trust
in TX

Client Services Consultant -Phoenix
for One America
in AZ



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