| BenefitsLink Retirement Plans Newsletter |   |
January 20, 2005
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Overview: IRS Issues Final 401(k) Plan Regulations (PDF)
10 pages. Excerpt: "The IRS has finalized a comprehensive set of regulations on salary deferrals under Internal Revenue Code Section 401(k) and matching and post-tax employee contributions under Section 401(m). The final regulations adhere closely to the proposed regulations, which reorganized prior regulations and incorporated interim guidance. In addition, the final regulations add new guidance (e.g., expand the definition of a deemed hardship to include funeral expenses) and make other ...." (Mellon Financial Corporation)
Changes Proposed for Minnesota's State Employee Pensions
Excerpt: "Minnesota's public employees would see their paychecks shrink if proposals to raise state pension contributions become law. Public employees and the governments they work for each contribute toward the state pension fund. The employee deduction for police officers and firefighters was actually reduced several times, most recently in 1999, as good investment returns kept the pension fund fat. But poor returns and revised projections about future demands on the system have the ...." (AP via GrandForksHerald.com)
Talk of Changing Reported Pension Liabilities Raises Concern on Benefit Cuts
Excerpt: "The panel that sets accounting standards is now preparing a proposal that would require many big American companies to give a more accurate financial picture of their pension plans. As a result, a number of them will have to increase the pension liabilities on their books, in essence telling investors that they owe their employees more than they have disclosed in the past." (The New York Times; one-time registration required)
Few Guarantees for Corporate Pension Plans
Excerpt: "A key government program that helps employees finance their retirement is reaching crisis stage. No, not Social Security, which even the most dire economic forecasts show has years to run before running low on cash. It's the Pension Benefit Guaranty Corp., the quasi-federal agency that insures corporate pension plans and which is buckling under a record $23.3 billion deficit." (Law.com)
United Airlines and Pilots Union Reach Revised Agreement on Pay Cuts and Benefit Changes
Excerpt: "Leaders of United Airlines' pilots union yesterday approved a revised cost-cutting agreement with the airline .... Details of the agreement were not released, but sources familiar with it said it calls for the pilots to accept about a 14 percent cut in pay and benefits, amounting to a $180 million annual savings for the airline. It also allows both sides to negotiate changes to the pilots' pension plan -- a highly contested issue -- later." (The Washington Post; one-time registration required)
U.S. Workers Save More and Are Better Prepared for Retirement Than Workers Elsewhere
97 slides. Excerpt: "Americans See 55 as 'Ideal' Retirement Age People save more for retirement in the U.S. than in any other country, but most Americans expect to work longer than they desire, according to AXA Retirement Scope, a unique global survey on life, work and retirement released [January 19, 2005]." (Axa Financial, Inc.)
Your Retirement Plan's Most Important Document May Be the One You Lack
Excerpt: "The most important document for managing your retirement plan may well be the one you are not required to have. Ironically, it is widely cited as the first document Labor Department auditors will ask for when they come calling and, yet, more than a quarter of respondents to PLANSPONSOR's Eighth Annual Defined Contribution Survey still admit they do not have one. .... The missing document? The investment policy statement, or IPS." (PLANSPONSOR.com; one-time registration required)
The Other Problem with Social Security -- Benefit and Eligibility Determination
Excerpt: "The government safety net provides income to families in the event of retirement, death or disability, and more than 47 million Americans collect some sort of benefit. But the rules that determine the Social Security benefits to which someone is entitled -- and in what amount and when -- can be exceedingly complex." (Wall Street Journal via SFGate.com)
Options Sought on Social Security Proposal: GOP Lawmaker Wants Alternatives to Payroll Taxes
Excerpt: "A key House Republican leader on Social Security said yesterday he has begun exploring ways to finance a restructured Social Security system other than through diverting payroll taxes from current beneficiaries. The comments by Rep. Jim McCrery (La.), chairman of the Ways and Means subcommittee on Social Security, signaled a significant step away from President Bush's Social Security plans." (The Washington Post; one-time registration required)
Republicans Urge the White House to Consider Tax Increases for Social Security
Excerpt: "President Bush has adamantly opposed tax increases as part of a solution to long-term Social Security problems. But Republicans have begun floating possible alternatives for changing the system as they confront mounting opposition to plans for personal accounts. Democrats, too, have begun to seize on the increasingly vocal reservations by their counterparts." (The New York Times; one-time registration required)
Accounting Proposal May Negatively Impact Stable Value Funds: ICMA Response
Excerpt: "The Financial Accounting Standards Board (FASB) is currently considering changes to commingled stable value funds that could adversely impact these investment vehicles, particularly for small- and medium-sized retirement plans." (ICMA Retirement Corporation)
Opinion: Doing the Math on Private Accounts: Why Investors Will Want to Fund Them
Excerpt: "I am not arguing that the partial privatization of Social Security is a good idea (I have my concerns), and I am not arguing that private accounts will fix Social Security's financial problems (they won't). But suppose Social Security is overhauled, and suppose, as many pundits expect, that we end up with a mix of traditional Social Security benefits and private accounts, as called for in 'reform model 2' suggested by President Bush's 2001 Social Security commission." (Wall Street Journal via SFGate.com)
Audio Commentary: Bush May Have Trouble Winning Support on Social Security Overhaul
Excerpt: "Senior News Analyst Daniel Schorr says that the Bush Social Security plan may be a hard sell, even to Republicans." (All Things Considered via National Public Radio)
Seven Letters to the Editor of The New York Times: Social Security --Enough to Get by on in Old Age?
Excerpt: "The suggestion by Paul O'Neill, ..., that we replace Social Security with an index fund-based forced investment system is a far sight better than the plan proposed by President Bush. But it misses the fundamental point for which the system was created: to guarantee the elderly a minimal income whether the country is in a time of prosperity or a time of hardship. The problem with this proposed investment scheme is that it simply ignores the possibility of a downturn in the economy." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
The Death of the Discount Stock Option
Excerpt: "A frequent planning technique for management compensation has been the issuance of non-qualified stock options where the option exercise price is less than the fair market value of the option stock on the date of grant. This planning technique is no longer tax effective under the American Jobs Creation Act of 2004 (the 'JOBs Act'), which was enacted on October 22, 2004." (Andrew Rudolph, Esq. and David Kaplan, Esq., Pepper Hamilton, LLP via BNA Tax Management)
Layoff Of Employee To Reduce Costs Did Not Violate ADEA Or ERISA, Eighth Circuit Rules
Excerpt: "The layoff of an employee in conjunction with a series of cost-cutting measures did not violate the Age Discrimination in Employment Act (ADEA) or ERISA. This was the ruling of the Eighth Circuit U.S. Court of Appeals in Iverson v. Ingersoll-Rand Company (No. 03-3411)." (Spencer Benefits Reports)
Newly Posted Events
2005 Plan Administration Skills Workshop -- Dallas
in Texas on February 4, 2005
presented by SouthWest Benefits Association
2005 Plan Administration Skills Workshop -- Houston
in Texas on February 25, 2005
presented by SouthWest Benefits Association
2005 Plan Administration Skills Workshop -- Oklahoma City
in Oklahoma on February 18, 2005
presented by SouthWest Benefits Association
First Quarter 2005 Update
Nationwide on February 17, 2005
presented by McKay Hochman
Newly Posted Press Releases
ERISA Fiduciary Guild Announces Special Advisory Board
(ERISA Fiduciary Guild)
Newly Posted or Renewed Job Openings
Defined Benefit Calculation Specialists
for Constantin Control Associates
in NJ
Pension Plan Administrator
for South Florida TPA
in FL
Marketing/Sales/Enrollments
for South Florida RIA, TPA and Record Keeping Firm
in FL
Retirement Plan Administrator
for Independent Retirement Plan Administration Company
in FL
Associate Account Manager Health & Welfare Practice
for Charles W. Cammack Associates, Inc.
in NJ, NY
Employee Benefits Tax Group - Manager
for Deloitte & Touche
in IL
Client Data Processor
for Decimal, Inc. - The Online 401(k)
in CA
Employee Benefits Paralegal
for Chang, Ruthenberg & Long
in CA
Benefits Delivery Manager
for Hewitt Associates
in IL
Handy Links:
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- 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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