| BenefitsLink Retirement Plans Newsletter |   |
January 18, 2005
Today's sponsor: PenChecks, Inc.
(Click on company name or banner to learn more.)
New Federal Regulations Go Into Effect March 28,2005! We have the solution for Missing Participants, Automatic/Default Rollover IRA Programs...Simple, Affordable, Efficient. PenChecks, Inc. is the industry leader in Benefit Distributions, Missing Participant, and Automatic/Default Rollover IRA Programs. We consistently solve industry-wide problems regarding Missing Participants and Automatic/Default Rollover IRAs, as well as the complexities of processing Benefit Distributions. For more information Click Above or call 800-541-3938
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
DOL Audits of 401k Deposits Part of DOL's National Enforcement Project
Excerpt: "Current DOL regulations provide that employee contributions to a 401k plan become plan assets as of the earliest date on which such contributions could reasonably be segregated from the employer's general assets ..., but in no event later than the 15th business day of the month following the month in which the contributions are received by the employer or, in the case of amounts withheld from wages, would otherwise have been payable to the participant (the 'maximum period')." (401khelpcenter.com, LLC)
Safe-Harbor 401(k) Plans Growing in Popularity
Excerpt: "Carrot and stick: Congress designed the 401(k) plan rules so that strong worker participation was required for employers to get the plan's full benefit. Plans must be tested annually to determine how much business owners and highly paid employees can contribute. Not only were these rules onerous for small and midsized businesses, they were costly. In the late 1990s, Congress amended the rules. It created what is known as a safe-harbor 401(k) plan. With this plan, annual testing ...." (East Bay Business Times via bizjournals.com; one-time registration required)
Overview: Court Finds Post-Death QDRO to Be Valid and Enforceable
Excerpt: "[IBM Savings Plan v. Price, No. 2:04-CV-187 (D. Vt. 2004)] In this case, a 401(k) plan participant died after a divorce decree was issued awarding his former spouse a portion of his 401(k) plan account and after the proposed QDRO was submitted to the plan, but before either the court or the plan had approved the proposed QDRO. For a copy: http://nysd.uscourts.gov/courtweb/pdf/D02VTXC/04-08579.PDF." (Employee Benefits Institute of America Inc.)
The Fortune 100: Pension Funding Shortfalls Decline, but Deferred Costs Continue to Rise (PDF)
4 pages. Excerpt: "At year-end 2004, we estimate that the pension plans of the Fortune 100 companies that sponsor defined benefit plans were 88% funded, on average, up from 2002's low watermark of 78%. Increased funding, in amounts higher than the cost of benefits earned during the year, has contributed to the improvement in funded ratios. Nonetheless, Towers Perrin estimates that aggregate underfunding in these companies was still high -- $79 billion -- at year-end 2004." (Towers Perrin)
2004 Brought Mixed Results for Pension Plans (PDF)
4 pages. Excerpt: "Capital market results had little impact on pension plan financing in 2004, with relatively strong equity returns offset by a continuing decline in long corporate bond yields. The falling long bond rates represent the continuation of a pattern that started at year-end 1999. The net result was a negligible 10 basis point decline in the funded ratio for our benchmark plan, to 85.1%. This report reviews capital market performance and its effects on Towers Perrin's benchmark ...." (Towers Perrin)
UAW Says Bush Private Pension System Reform Plan Would Wreck System
Excerpt: "The Bush Administration's proposal to shore up the nation's private pension system will have quite the opposite effect, according to the United Auto Workers. The union's legislative director, Alan Reuther, wrote to Capitol Hill this week warning lawmakers not to support the plan that Labor Secretary Elaine Chao announced on Monday for reforming 'defined benefit' pensions ...." (PLANSPONSOR.com; one-time registration required)
Analysis Finds Flaws in South Carolina Retirement Plan Fix: Sanford Idea Won't Ease Growing Debt
Excerpt: "Gov. Mark Sanford's plan to tweak benefits offered through the state pension system wouldn't do enough to curb mounting debt, according to an analysis by state financial experts. Sanford proposed last month scrapping the TERI program for future employees and increasing the number of years needed for retirement back to 30 years from 28 years." (Knight Ridder via The Sun News)
IRA Tax Forms: What Is the Individual's Responsibility?
Excerpt: "Individual retirement account (IRA) custodians/trustees have specific Internal Revenue Service (IRS) reporting requirements. .... Have you ever wondered what an IRA owner's IRS reporting requirements might be? Are these requirements an extension of the reports an IRA custodian/trustee provides?" (Bankers Systems Retirement Plan Services)
2005 Compliance Calendar for Defined Contribution Plans Available from Mercer
Excerpt: "The WRG has prepared 2005 compliance calendars listing some of the most important IRS, DOL, and PBGC reporting and disclosure deadlines for calendar year defined benefit and defined contribution retirement plans. For health and benefit plans, refer to the 2005 compliance calendars on the LIS H&G ComplianceConnection." (Washington Resource Group, Mercer Human Resource Consulting)
2005 Compliance Calendar for Defined Benefit Plans Available
Excerpt: "The WRG has prepared 2005 compliance calendars listing some of the most important IRS, DOL, and PBGC reporting and disclosure deadlines for calendar year defined benefit and defined contribution retirement plans. For health and benefit plans, refer to the 2005 compliance calendars on the LIS H&G ComplianceConnection." (Washington Resource Group, Mercer Human Resource Consulting)
Information Available on Individual Company Pension Plans at Web Site
Excerpt: "Dan Cole, research director of freeERISA.com, recently answered some questions about how workers and retirees can get information about their companies' pension plans. The free Web site gives visitors retirement and welfare benefit information on the group or groups of their choice." (Scripps Howard News Service via Seattle Post-Intelligencer)
Plan Administrators and Sponsors Will Play Key Role in Mutual Fund Settlement Payouts
Excerpt: "More than a dozen major mutual fund providers and advisers have settled with federal and state regulators over market-timing and late-trading practices and set aside money to reimburse investors. For plan sponsors and administrators, the challenge is figuring out what role they will play in distributing millions from those settlements to employees." (Employee Benefit News)
Workers Can No Longer Count on Company-Funded Retirements
Excerpt: "[W]ith concerns being raised about Social Security's fiscal health, there is also alarm about the second most important source of financial support for retirees--private pensions. In the past several weeks, United Airlines and US Airways have handed off underfunded pension plans to the PBGC, which announced in November it faced a future $23.5 billion shortfall. Analysts now fear a stampede of corporate copycats could threaten millions more pensions." (U.S. News & World Report)
Some Retirees Are Running on Empty, According to EBRI Report on Financial Wealth
Excerpt: "One-fifth of recent retirees appear to be on track to deplete their total assets before dying, a new study indicates. .... The Employee Benefit Research Institute this week released a report that looked at Americans who had reached age 61 to 71 by 2002, the endpoint of the institute's 10-year analysis of wealth accumulation and wealth management." (Kansas City Star; one-time registration required)
No Call for Agency to Sell Fix for Social Security, Aide Says
Excerpt: "A senior White House official said on Sunday that career employees of the Social Security Administration would not be asked to advocate 'any specific pres.cription' for the program's financial problems, but he defended government efforts to convince people that the problems were severe." (The New York Times; one-time registration required)
Opinion: Pension Benefit Guaranty Corporation, Insecurity about Pension Promises, & Social Security
Excerpt: "Journalism sometimes involves reporting to readers the considerable importance to them of something they never knew existed. Such as the 30-year-old Pension Benefit Guaranty Corporation. Its existence may be necessary, but it causes 'moral hazard,' and is pertinent to the debate about how to guarantee the benefits of the biggest pension system, Social Security." (George Will via IndyStar.com)
Opinion: Bush's House of Cards: The Privatization Fraud -- A Special Report in The American Prospect
Excerpt: "The Century Foundation, the Campaign for America's Future and the Economic Policy Institute, cosponsored this special report of The American Prospect on the drive to privatize Social Security. The issue features articles including Century Foundation President Richard Leone and program officer Libby Perl on how young people would be harmed by Social Security privatization." (The Century Foundation)
Opinion: A Historical Perspective on Social Security Bashing
Excerpt: "President Bush claimed last week that the Social Security system would be 'flat bust, bankrupt' in 40 years 'unless the United States Congress has got the willingness to act now.' Given that professional economic forecasters are seldom correct when they predict what will happen in the next four quarters, it is difficult to accept 40-year estimates made by an amateur forecaster, even if he is the president." (The New York Times; one-time registration required)
Opinion: Make Social Security Personal Accounts Mandatory to Achieve Success
Excerpt: "At first blush it seems fair and reasonable to let Americans opt in or out of personal accounts. But if the experience of other nations is any guide, personal accounts usually work better when they're mandatory -- as they are in Chile, Hungary, Mexico, Poland, and Sweden. When accounts are voluntary, low-income workers are less likely to participate -- leaving them stranded in traditional social security systems that governments are desperately trying to shrink." (BusinessWeek Online)
CBO Compilation of Their Social Security Analyses Published 1998-2004
The CBO has compiled the most recent publications on Social Security by topics as follows: Overview, Social Security Outlook, Policy Analyses, Individual Accounts and Investments in Private Assets, and Retirement Saving. (U.S. Congressional Budget Office)
Opinion: A Snapshot of Social Security Today
Excerpt: "Today we offer the first in an occasional series of discussions about Social Security that we hope will answer some of those questions; today's piece is a kind of Social Security 101, an introduction to the existing system. These editorials, along with our other, more news-driven coverage of Social Security, will remain available on our Web site, at www.washingtonpost.com." (The Washington Post; one-time registration required)
Opinion: The Future of Social Security As It Stands Today
Excerpt: "The actuarial view is that the system is probably in need of a small adjustment of the sort that Congress has approved in the past. But there is a strong argument, which the agency acknowledges as a possibility, that the system is solvent as is. Although prudence argues for making a fix sooner rather than later, the program is not in crisis, nor is its potential shortfall irresolvable. Ideology aside, the scale of the fixes would not require Social Security to abandon the role ...." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Accounting Roundup: 4th Quarter 2004 in Review (PDF)
25 pages. Excerpt: "During the fourth quarter of 2004, accounting standard setters and accounting regulators issued a number of final and proposed FASB Statements, FSPs,* EITF consensuses, GASB Statements, AcSEC SOPs, SEC rules, PCAOB rules, IFRSs, etc. (collectively, pronouncements) affecting accounting, financial reporting, and corporate governance. This publication, , presents brief descriptions of those pronouncements, as well as certain ...." (Deloitte Development LLC)
Life After Disney: The Evolving Role of Directorial Good Faith in Executive Compensation
Excerpt: "Disney served notice to directors of Delaware corporations that the Court of Chancery will not permit directors to ignore their fiduciary responsibilities in deference to management when faced with a decision concerning executive compensation. In doing so, the Court made clear that, while Section 102(b)(7) and the business judgment rule allow independent directors to make reasoned decisions free from the threat of personal liability based on judicial hindsight, the complete ...." (Tax Management Compensation Planning Journal via Buchanan Ingersoll PC)
Hewitt Federal Legislation Quick Guide Updated January 11, 2005
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)
Fraud Suit Filed Against Garden State Union by Two Trustees
Excerpt: "A lawsuit filed in US District Court in New Jersey is alleging that several employees of Local 734 of the Laborers' International Union of North America defrauded the pension and welfare funds of over $1 million. The lawsuit, filed by Patrick Byrne and Paul Drazen - trustees of the local's funds - alleges that the employees swindled its members by providing jobs and overpaid positions to relatives and close associates, according to New Jersey's Bergen Record." (PLANSPONSOR.com; one-time registration required)
Changing World of Employee Benefits -- Paper with Final Edits Approved 4/6/04 (PDF)
29 pages. Excerpt: "When I graduated from law school in 1985, there were no courses offered in employee benefits law. Nor, as near as I can recall, was ERISA ever discussed in any of the labor and employment classes I took. There was no mention in the introductory labor law course or in other classes about employment discrimination, union organizing, and employment arbitration. Now, in contrast, many law schools include a course on employee benefits and ERISA, and students hoping to work ...." (Maria O'Brien Hylton)
National Compensation Survey: Employee Benefits in Private Industry in the United States, 2002-2003 (PDF)
135 pages. Excerpt: "This bulletin presents findings of the 2002–2003 Bureau of Labor Statistics (BLS) survey of the incidence and provisions of selected benefit plans and detailed provisions of health care and retirement plans in private industry establishments. The tables with a 2003 reference date contain data on the incidence and key provisions of selected benefit plans. The tables with a 2002 reference date contain detailed provisions of health care and retirement benefits." (U.S. Bureau of Labor Statistics)
Newly Posted Events
403(b) Plan Workshop
in Minnesota on March 17, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Pennsylvania on March 17, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Indiana on March 17, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in District of Columbia on March 18, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Iowa on March 22, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Michigan on March 22, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Kansas on March 23, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Georgia on March 23, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Illinois on March 23, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Texas on March 30, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in New York on March 30, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Texas on March 31, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in California on March 31, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in New York on March 31, 2005
presented by SunGard Corbel
403(b) Plan Workshop
in Massachusetts on April 7, 2005
presented by SunGard Corbel
403(b) Plans Workshop
in North Carolina on March 22, 2005
presented by SunGard Corbel
HIPAA Security Rule Basics (Online course)
Nationwide on January 14, 2005
presented by International Foundation of Employee Benefit Plans
Public Policy Fly-In
in District of Columbia on March 2, 2005
presented by Profit Sharing/401(k) Council of America (PSCA)
The Legality of Kickbacks: How 401(k) Vendors Are Paid on the Eve of SEC and DOL Investigations
Nationwide on January 28, 2005
presented by Revere Coalition
There’s Money On the Table: How to Qualify For the Employer Subsidy Under the New Medicare Prescription Drug Law
Nationwide on February 3, 2005
presented by Centers for Medicare & Medicaid Services (CMS)
Understanding the New Tax Rules of Nonqualified Deferred Compensation Plans
in Georgia on February 1, 2004
presented by Swerdlin & Company
Newly Posted Press Releases
Benefit Advisors Network Welcomes Clark & Lavey
(Benefit Advisors Network)
Pennsylvania First to Receive National Grant; `Investor Education PA' Will Benefit 44,000 Students Each Year
(Pennsylvania Securities Commission (PSC))
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Mark S. Ruddick
(PERFORMAX)
Joshua B Tait, LTCP -515-314-5433
(Joshua B Tait, LTCP)
Newly Posted or Renewed Job Openings
Plan Administrator
for New York Life Investment Management LLC
in MA
Health Insurance & Group Insurance Sales Executive
for Alliance Benefit Group of Kansas City, Inc.
in IA, KS, MN, MO
Senior Consultant - Retirement Plan Services
for Tofias PC
in MA
ERISA Consultant
for New York Life Investment Management LLC
in MA
Retirement Services District Manager (SALES)
for ADP Retirement Services
in FL
Client Manager Assistant
for Pentec, Inc.
in CT
Pension Administrators
for Primary Consulting, Inc.
in ANY STATE
Small Plan Actuarial Consultant
for Pension Planning Consultants, Inc.
in NM
Institutional Services Communication Specialist I
for BB&T
in NC
Salaried Benefit Counselor
for iComm Benefit Solutions, Inc
in MN
DBP Project Manager - Entry
for Hewitt Associates
in IL
Quality Assurance and Financial Analyst
for Hewitt Associates
in IL
Benefits Administrator
for Ralcorp Holding, Inc.
in MO
ERISA Sales Consultant
for American Pensions, Inc.
in FL, SC
Benefits Service Manager
for Hewitt Associates
in IL
Participant Education Consultant
for The Vanguard Group
in PA
401K Internal Wholesaler
for ADP Retirement Services
in NJ
401(k) Client Service Representative
for ADP Retirement Services
in NJ
Retirement Services Implementation Specialist
for ADP Retirement Services
in GA, OH
Daily Valuation Manager
for IPA Northeast, LLC
in NJ
Qualified Plan Administrator
for Merlino Employee Benefits Group, LLC
in RI
Manager - Employee Benefits
for Telephone and Data Systems, Inc.
in WI
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.
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Editor and Publisher: David Rhett Baker, J.D.
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