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January 25, 2005
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Overview: Final Automatic Rollover Regulations Require Qualified Plan Amendment (PDF)
3 pages. Excerpt: "The Economic Growth and Tax Relief Reconciliation Act of 2001 ('EGTRRA') amended section 401(a)(31) of the Internal Revenue Code('Code') to require that, absent an affirmative election by a plan participant, small benefit cashout distributions of more than $1,000, and not greater than $5,000, must be directly transferred to an individual retirement account or annuity('IRA')." (Dechert LLP)
Overview: IRS Repatriation Guidance Permits Funding Qualified Benefit Plan
Excerpt: "January 13, 2005: The IRS and the Treasury Department today released IRS Notice 2005-10, the first in a series of guidance for domestic companies planning to repatriate earnings subject to the temporary reduced tax rate provided under the American Jobs Creation Act (AJCA, or the Act). .... Today's notice provides that, among other things, an employer may use repatriated funds to satisfy an obligation to a fund a qualified plan as part of a 'financial stabilization' investment." (The ERISA Industry Committee)
Over the Past Year, the Funding Gap in the Nation's Defined Benefit Plans Has Jumped to $450 Billion
Excerpt: "Last year President Bush signed a bad bill that allowed companies to underfund their retirement promises to workers. At the time of this error, 'defined benefit' pension plans -- the sort that, unlike a 401(k), guarantee a fixed benefit upon retirement -- already had $350 billion less in them than was needed to meet obligations to retirees. But Mr. Bush went ahead regardless, signing a bill that cut companies' contributions to their defined-benefit plans by $80 billion over two ...." (The Washington Post; one-time registration required)
Defined Benefit Plan Sponsors Should Look at Interest Rate Swaps, According to Merrill Lynch
Excerpt: "With an accounting shift to a mark to market approach on the horizon, defined benefit traditional pension plan sponsors should adopt a program of interest-rate swaps to help better manage their interest rate exposure. That was the assertion of three Merrill Lynch analysts in a new research paper, Swapping the Paradigm, which claimed that the mark to market change 'is not a question of if, but a question of when ....'" (PLANSPONSOR.com; one-time registration required)
Text of GAO Report Labeling PBGC Single-Employer DB Insurance Program as 'High-Risk'
95 pages. Excerpt: "Overall, our high-risk program has served to identify and help resolve serious weaknesses in areas that involve substantial resources and provide critical services to the public." (U.S. Government Accountability Office)
California Airtime Provision: Additional Retirement Service Credit (ARSC) for CalPERS Members
Excerpt: "'Airtime' or Additional Retirement Service Credit (ARSC) gives active CalPERS members with five years of earned service credit the opportunity to purchase from one to five years of additional service credit to increase their unmodified retirement allowance." (ICMA Retirement Corporation)
Comparing the Retirement Savings of the Baby Boomers and Other Cohorts
Excerpt: "This study compares the retirement savings behavior of four different age cohorts and finds that Older Baby Boomers (born from 1946 to 1954) are somewhat more likely than the other cohorts to hold a retirement account. It also finds that households in the Swing cohort (1928 to 1945) hold the largest amount of retirement savings, followed by, in order, households in the Older Boomers, Younger Boomers (1955 to 1964), and Generations X and Y (1965 to 1987) cohorts." (Compensation and Working Conditions Online)
Can.ada's Le Pan `Worried' by Drop in Defined Benefit Pensions
Excerpt: "Canadian politicians aren't paying enough attention to the falling use of pension plans with guaranteed monthly payments, the federal pension regulator said, possibly leaving many retirees without enough money to live on. The number of so-called defined-benefit plans among the 1,256 federally regulated pension programs overseen by Superintendent of Financial Institutions Nicholas Le Pan fell 4.5 percent to 336 in the two years ended March 31." (Bloomberg News)
Social Security Gets Stretched, Strained by Early and Long Retirements
Excerpt: "Americans are retiring earlier -- half retire at age 62 -- and living longer. That's the problem, at least for Social Security. .... Early retirement and longer lives have placed an enormous burden on the federal government's national retirement program, threatening the long-term solvency of Social Security. The upcoming retirement of 76 million baby boomers -- those born from 1946 to 1964 -- has made the issue of long retirements especially urgent. The first boomer turns 62 in 2008." (USA TODAY)
Bush Social Security Reform Plan Drawing Skepticism, AARP Survey Reveals
Excerpt: "Most American workers want to preserve Social Security but are losing confidence that it will survive long enough to pay promised benefits when they retire, according to an AARP survey released on Monday. The survey also indicated that Americans are divided over President Bush's proposal to create individual investment accounts under Social Security but turn strongly against it when told about potentially negative consequences." (South Florida Sun-Sentinel)
Opinion: Mexico's Undeclared War on America: Social Security Pact in Congress Provides No Parity
Excerpt: "Advocates of 'open borders' want the US to sign this Social Security agreement with Mexico and the Bush administration is claiming only 50,000 Mexicans would qualify ....... Rep. Rohrabacher says simply enough, 'We are talking about huge sums of money -- not just for retirement, but for disability payments, premature deaths, caring for the families of illegal immigrants', adding that 'it is an outrageous violation of our obligation to watch out for senior citizens of the United States.'" (AnxietyCenter.Com via AXcess News)
Opinion: The Truth About Social Security Even Eludes the Supposed Truth-Seekers -- FactCheck.org
Excerpt: "It's a sad commentary on the state of public discourse when you have to fact-check FactCheck.org. But that's what it's come to. The non-partisan project of the Annenberg Public Policy Center of the University of Pennsylvania was a reliable guide to the issues during the last presidential election, .... But now that the debate over Social Security reform has gotten increasingly nasty and complex, FactCheck.org seems to have lost its way." (National Review)
Opinion: Social Security Vs. Stocks: Another Look
Excerpt: "In the escalating debate for the future of Social Security, forecasts are popping up faster than prairie dogs at dawn. But forecasts without context can be misleading. Here are answers to some key questions on the issue - and a correction." (The Christian Science Monitor)
White House Looking for Ways to Ease Opposition to Social Security Overhaul
Excerpt: "The Bush administration, facing opposition from Democrats and unease among Republicans over its plan to overhaul Social Security, is looking at new ideas for cutting future benefits that would hit wealthy retirees harder than those in the middle or bottom ranks of wage-earners, people involved in the discussions say." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Overview: Treasury Guidance on Section 409A Rules for Nonqualified Deferred Compensation Plans
Excerpt: "Section 409A significantly changed the rules regarding the timing of deferral elections under, and distributions from, non-qualified deferred compensation plans. The recent enactment of section 409A raised numerous questions as to which deferral arrangements are covered, as well as how 2004 and 2005 deferrals should be treated. [Target page addresses] highlights from Treasury's transition guidance." (Ballard Spahr Andrews & Ingersoll, LLP)
Webcast: Evaluating 404 IT Deficiencies -- A Practical Approach that Works
Excerpt: "As accelerated filers race to the finish line for year one compliance with Section 404, much work remains in the area of testing exceptions and evaluating deficiencies. .... In this session, our panelists will provide insights about common testing exceptions, as well as focus on practical approaches to evaluating deficiencies." (Ernest & Young; one-time registration required)
Newly Posted Events
A Legislative Update from D.C. For Public Sector Pension Plans
Nationwide on February 15, 2005
presented by International Foundation of Employee Benefit Plans
Share Equity: Create Value
in California on April 20, 2005
presented by National Center for Employee Ownership (NCEO) and the Beyster Institute
The New HIPAA Portability Regulations
Nationwide on December 30, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)
Newly Posted Press Releases
Employees Overwhelmed by Benefit Choices and Greater Responsibility
(Principal Financial Group)
Statement of Labor Secretary Elaine L. Chao On GAO Report Regarding Pension Benefit Guaranty Corporation
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Newly Posted or Renewed Job Openings
Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ
Supervisor, Client Services
for BISYS Retirement Services
in PA
Director - Compliance, State Filing Manager - Annuities
for MassMutual Financial Group
in CT
Remittance Services Analyst
for ICMA Retirement Corporation
in DC
Operations Technical Specialist
for ICMA Retirement Corporation
in DC
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