| BenefitsLink Retirement Plans Newsletter |   |
January 13, 2005
Today's sponsor: BeneCom Associates, LLC
(Click on company name or banner to learn more.)
BeneCom Associates, LLC, for one-stop benefit communications Since 1992, BeneCom has produced benefit communications, including enrollment materials, SPDs, benefit statements, newsletters and more, for companies large and small, nationwide. So if you've been looking for an independent benefit communications specialist, look no further. Click above for more information, or give us a call at (860) 674-2626, Ext. 11. We're here to help.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
For This Retiree, a Pension Plan's Broken Promise
Excerpt: "[Jerry] Fallos was 55 when he quit work and was entitled by the United Steelworkers contract to a full pension. While LTV had gone bankrupt, its pensions were insured by the federal agency set up to protect workers from the broken promises of failed companies -- the Pension Benefit Guaranty Corp. Fallos was about to get an education." (StarTribune.com)
Sleuthing for Pension Dollars
Excerpt: "The Texas pension counseling program began taking calls on its toll-free hotline only days ago, so it's too soon to talk about any successes. Yet pension experts say older counseling programs in other parts of the country have turned up pensions ranging from several thousand dollars to several hundred thousand dollars." (The Dallas Morning News; one-time registration required)
Toward a More Complete History: Johnson & Johnson's 401k Nursery
Excerpt: "As a matter of history, IRC Sec. 401k came into existence much earlier than 1981; it was introduced by the Revenue Act of 1978. In late 1979, I was transitioning from a benefits manager position to my future position as manager of executive compensation. It was during that transition that I read this new deferred compensation provision of the tax code, 401k, for the first time." (Employee Benefit Research Institute via 401khelpcenter.com, LLC)
Perspective on Pension Funding: A Fresh Look at a Growing Crisis (PDF)
8 pages. Excerpt: "The current pension funding rules have drawn sharp criticism from three key stakeholders – employers, employees, and pension policymakers. Employers object to volatile contribution requirements, employees are alarmed by the risks that severely underfunded plans pose to their retirement security, and policymakers are concerned about the PBGC's growing deficit and the specter of a taxpayer bailout." (Mercer Human Resource Consulting, Inc.)
Overview: Phased Retirement Programs Get a Lift from IRS
Excerpt: "Companies interested in setting up a phased retirement program -- or in building on an informal program that they already have in place -- now have some long-awaited guidance from the Internal Revenue Service (IRS) in the form of a notice of proposed rulemaking that would allow certain in-service distributions from pension plans before normal retirement age." (Towers Perrin)
Missed Your RMD Deadline? Here's What to Do
Excerpt: "Failing to withdraw your [Required Minimum Distribution] by the applicable deadline may result in you owing the IRS an excise tax of 50% of the RMD shortfall .... If for any reason you miss your deadline, there are some steps you must take." (Denise Appleby, CISP, CRC, CRPS, CRSP, APA on Investopedia.com)
Overview: Automatic Rollover Rules: IRS Guidance and an Update on the Vendor Landscape
Excerpt: "In a Notice released just before year-end, the IRS provided guidance on the new automatic rollover rules that take effect March 28. In this Update, we review this IRS guidance and also update you on the vendor landscape." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.)
Overview: DOL Issues Guidance on Directed Trustees' Responsibilities
Excerpt: "Field Assistance Bulletin (FAB) 2004-03 (December 17, 2004) ... provides much needed clarification of the DOL's position on the obligation of directed trustees to question, and even refuse to carry out, directions in certain situations." (Deloitte)
U.S. Social Security Reform Plan Called More Radical Than Problem
Excerpt: "Few countries have attempted social security shake-ups as far-reaching as those mooted by the current U.S. administration, even though many economists argue the U.S. system is least in need of radical surgery. The problem common to all developed countries is that aging populations, due to rising life expectancy and the impending retirement of the baby-boom generation, look set to drain pay-as-you-go state benefit systems over the next 50 years." (Reuters)
Opinion: Social Security: Defending the Cap on Earnings
Excerpt: "Most people resolve in the new year to fix things in their personal lives - their 5km race time, their bunion. My resolution, though, is about economics. In 2005, I will do what I can to save the cap. The cap - as technicians refer to it - is the earnings ceiling above which US workers' income is free of government pension taxes. Currently, workers pay into Social Security 6.2 per cent in tax on only the first $90,000 they earn." (TownHall.com)
Opinion: Is Social Security in Trouble? Depends on Whom You Ask
Excerpt: "Differences on the issue are so wide that the two sides cannot even agree on the threshold question: Is the Social Security system really in financial trouble? 'The answer is, it depends on your time horizon,' says Brigitte C. Madrian, professor of business and public policy at Wharton. 'There is no crisis tomorrow. There is money, benefits will be paid ... But at some point in the future the money is going to run out, and at that point there are two choices: increase taxes or ....'" (Wharton School of the University of Pennsylvania)
Opinion: Proposal by the President's Social Security Commission Whittles Away at Income Support
Excerpt: "The White House has signaled that it supports the key proposal by President Bush's 2001 commission on Social Security to freeze future growth in Social Security benefits by fixing them to current living standards. This is a change from the current law, which increases benefits to reflect the life time earnings of future workers. Because American workers' pay will most likely grow faster than inflation in the future, this change would steadily lower the share of income that ...." (Economic Policy Institute)
Opinion: Does It Matter Who Saves, You or the Government? National Savings or Social Security?
Excerpt: "The main economic criticism leveled at President George W. Bush's initiative to overhaul Social Security and create private retirement accounts is that it won't increase national savings. Without an increase in national savings, economists say, all you have is the same old pie with the slices divvied up differently between the government and the private sector. .... The government 'saves' for our retirement by taxing today's workers and forking it over to today's retirees." (Bloomberg News)
Changes in Wealth for Americans Reaching or Just Past Normal Retirement Age (PDF)
36 pages. Excerpt: "This Issue Brief provides a first step in determining how retirees now starting to retire -- those first to be affected by the shift to lump-sum payments and 401(k) asset accumulation are managing their wealth. Americans born from 1931-1941 are the focus of this study, since these Americans ranged in age from 51-61 in 1992 (at the beginning of the study period) and had reached age 61-71 by 2002 (the end of the study period)." (Employee Benefit Research Institute)
Links to Items on Executive Comp, Benefits in General
Overview: Interpretations with Respect to 457(f) Plans under Guidance Provided under Notice 2005-1 (PDF)
16 pages. Excerpt: "According to IRS Notice 2005-1, taxpayers should note that although Code Section 409A makes a number of fundamental changes, it does not alter or affect the application of any other provision of the Code or common law tax doctrine (in particular, Code Section457(f))." (Gardner Carton & Douglas)
Overview: FASB Ushers In New Era in Accounting for Stock Options
Excerpt: "After decades of controversy and over a year and a half of deliberations the Financial Accounting Standards Board (FASB) issued a new accounting standard that will require companies to recognize an accounting expense for stock option grants and other stock-based awards. Under the new standard, which amends FAS 123 and is referred to as FAS 123(R), companies will no longer be able to follow the intrinsic value accounting method of the prior standard, APB 25." (Towers Perrin)
Insurers and Producers Should Organize Team to Evaluate Current Contingent Compensation Practices
Excerpt: "It is clear that some disclosure of compensation will ultimately be required by each of the states in the West Coast region. Both insurers and producers should begin to organize a contingent compensation team to evaluate current practices and procedures. Outside counsel should be consulted to provide expertise on conducting the evaluation and to ensure that privilege remains intact in the likelihood of civil, criminal or regulatory action." (Bullivant Houser Bailey PC)
Overview: Treasury's Initial Guidance on Nonqualified Deferred Compensation
Excerpt: "Compliance with section 409A and Treasury's guidance will involve not only an analysis of the obvious tax implications of the new law, but also the myriad of securities law, employment law, corporate governance, and business and accounting issues that will accompany most companies' review and amendment of their compensation programs and agreements." (Womble Carlyle)
Overview: Nonqualified Deferred Compensation Gets Relief for 2005 (PDF)
7 pages. Excerpt: "This Alert focuses on the IRS transition relief and other initial guidance that was recently issued in Notice 2005-1. Of key importance, most so-called nonqualified deferred compensation plans and arrangements will not need to be amended until the end of 2005 to comply with the new rules, as long as the plans are operated in good faith compliance with §409A." (Aon Consulting)
Overview: IRS Guidance under Code Section 409A Affecting Nonqualified Deferred Compensation Plans (PDF)
19 pages. Excerpt: "With the release of IRS Notice 2005-1, nonqualified deferred compensation plan sponsors have the first set of guidance regarding amendments needed to comply with new Code Section 409A." (Gardner Carton & Douglas)
OPM Moves to Standardize Pay and Benefits Rules for Federal Employees
Excerpt: "The Office of Personnel Management wants to standardize many of the pay, leave and hours of work rules to help agencies migrate to the standardized government wide e-Payroll system. Proposed rules published by OPM in the Federal Register on Jan. 5 include policies for standardizing minimum leave charges, military leave, teleworkers' locality pay, compensatory time for religious observances, time limits on the use of compensatory time, elimination of hybrid work schedules, annual ...." (GOVEXEC.com)
Prepare Now for 2005 Deferred Compensation Grants
Excerpt: "Compensation managers should also be aware of the need to set up a tracking system to distinguish grants made before Dec. 31, 2004, which are grandfathered under the old rules, and grants made on or after Jan. 1, 2005, which fall under the new rules. 'You won't be allowed to 'mix and match' monies under the different rules,' [Judy Thorp of KPMG] said, so a tracking system is critical." (Stephen Miller via Society for Human Resource Management)
Overview: FASB Issues Final Standard on Share-Based Payments
Excerpt: "This Alert highlights some of the important changes in FAS 123(R) as compared to both the original Exposure Draft and FAS 123." (Aon Consulting)
Newly Posted Events
2006 Great Lakes Benefits Conference
in Illinois on May 15, 2006
presented by American Society of Pension Professionals & Actuaries (ASPPA)
401(k) Plans
in Ohio on April 19, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
403(b) and 457 Plans: An Expanding Pension Market Webcast
Nationwide on January 26, 2005
presented by American Society of Pension Professionals & Actuaries (ASPPA)
Demonstration of Online Tools For Consumers Enrolled in Consumer-Directed Health Plans
in District of Columbia on January 25, 2005
presented by Kaiser Family Foundation
Extensive New HIPAA Portability Regs Just Issued! - How to Comply
Nationwide on February 10, 2005
presented by HRTrainingCenter.com
Form 5500 Update
Nationwide on March 24, 2005
presented by McKay Hochman Co., Inc.
HIPAA Security Countdown: Are You Ready?
Nationwide on January 26, 2005
presented by International Foundation of Employee Benefit Plans
HSA 2005
in Illinois on May 17, 2005
presented by Business Capital Edge
HSAs, HRAs, & Consumer-Driven Health Care
in Ohio on April 21, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Introduction to Form 5500
Nationwide on March 22, 2005
presented by McKay Hochman Co., Inc.
McKay Hochman First Quarter 2005 Update
Nationwide on February 17, 2005
presented by McKay Hochman Co., Inc.
Ongoing Webinar: Designing Your Life in Retirement -- A Guide to Planning Your Future
Nationwide on January 17, 2005
presented by Planning For Life
Ongoing Webinar: The Enhanced Lifestyle Planner: Organize Your Thinking & Expand Your Goals
Nationwide on January 20, 2005
presented by Planning For Life
Online Course: HIPAA Security Rule Basics
Nationwide on January 13, 2005
presented by International Foundation of Employee Benefit Plans
Newly Posted Press Releases
Eldercare, Phased Retirement Programs Impact Men and Women Differently, Watson Wyatt Analysis Finds
(Watson Wyatt)
Gilsbar, Inc. Named One of New Orleans’ Best Places to Work for the Second Year in a Row
(Gilsbar, Inc.)
Is The Revolution Now? Health Savings Account Survey Will Track Market
(Spencer Benefits Reports)
CalPERS Launches Phone Tip Line to Monitor and Prevent Disability Fraud
(CalPERS (California Public Employees' Retirement System))
New Employee Wellness Benefit Introduced: The "Managing My Life" Series
(Planning For Life)
ASPPA Partners with University of Michigan to Deliver Education and Examination Program
(American Society of Pension Professionals & Actuaries (ASPPA))
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Jim Femia
(Sentinel Benefits)
Newly Posted or Renewed Job Openings
Senior Plan Administrator
for American National Insurance Company
in TX
FSA Manager/Administrator
for Primark Benefits
in CA
FSA Salesperson
for Primark Benefits
in CA
Recruiter
for S.C. INTERNATIONAL, LTD.
in
Manager, Disbursement Services
for ICMA Retirement Corporation
in DC
Employee Benefit Communication Services Consultant
for Employee Benefit Solutions, Inc.
in TX
401(k) Record keeper
for Hoyman Dobson & Company P.A. CPA's
in FL
Employee Benefits Attorney
for Marvel Consultants, Inc.
in OH
Retirement Plan Specialist (PART-TIME)
for Diversified Investment Advisors
in MI
Employee Benefits Technical / Legal Consultant II
for BB&T Institutional Services
in NC
Actuarial Analyst
for McGladrey & Pullen
in IL
OptionsPlus Senior Account Administrator
for Fiserv Investment Support Services
in CO
Senior DC Administrator
for Coble Pension Group, L.L.C.
in AZ
Regional Sales Manager
for McGladrey & Pullen
in MN
Sr. Communications Associate -- Business Development and Marketing
for Scottsdale AZ Consulting Firm - Benefits & HR Outsourcing
in AZ
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Copyright 2005 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: