| BenefitsLink Retirement Plans Newsletter |   |
February 2, 2005
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Section-by-Section Summary of the Provisions of the Re-Introduced NESTEG Bill (PDF)
8 pages. Excerpt: "Sen. Chuck Grassley, chairman of the Committee on Finance, and Sen. Max Baucus, ranking member, today re-introduced their pension protection legislation -- the National Employee Savings and Trust Equity Guarantee (NESTEG) Act – which received unanimous Finance Committee support last year but never won final approval. The NESTEG bill would expand protections for retirement plan participants and require companies to allow their employees to diversify out of company stock, ...." (U.S Senate Committee on Finance)
Senators Introduce Pension 'NESTEG' Reform Bill
Excerpt: "A bipartisan United States Senate duo on Tuesday introduced a sweeping pension reform bill containing new participant protections for company stock investments among a wide variety of other provisions. A Senate Finance Committee news release said the proposal, the National Employee Savings and Trust Equity Guarantee (NESTEG) Act, was introduced by Chairman Senator Charles Grassley (R-Iowa) and ranking member Senator Max Baucus (D-Montana)." (PLANSPONSOR.com; one-time registration required)
Bush Administration Sets Stage for Defined Benefit Plan Rule Changes
Excerpt: "Defined benefit plan sponsors will confront tougher funding rules, higher pension insurance premiums and tighter disclosure requirements if rules proposed by the Bush administration become law. The proposals are an effort to shore up the Pension Benefit Guaranty Corporation, which faces a record deficit of $23.3 billion. Labor Department officials say the funding rules would make the pension system more stable and that the proposed premium hikes would boost PBGC revenues from ...." (Employee Benefit News)
United Airline's Defined Benefit Plans Safe, for Now
Excerpt: "Two unions agree to reductions in pay, and temporary cuts are imposed on another, but the airline and its four largest unions will deal with the defined-benefits issue at a later date." (CFO.com)
Pension Fund Claims Against Merrill Lynch Rejected by Court
Excerpt: "A U.S. judge yesterday dismissed claims against Merrill Lynch & Co. by WorldCom Inc. employees who say the firm oversaw their pension funds and bought stock in the failing long-distance company, causing hundreds of millions of dollars in losses. The WorldCom workers sought $100 million from Merrill, the largest securities firm by capital, accusing it of violating its duties as trustee for their pension funds by investing 401(k) money in company stock, lawyers said." (The Washington Post; one-time registration required)
Short Guide to Mandatory Rollovers of Small Balance Retirement Plan Cash-Outs
Excerpt: "The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) modified the rules applicable to involuntary distributions of small benefit amounts. The changes generally become effective on March 28, 2005, though different effective dates may apply for certain governmental and church plans." (Employee Benefit News)
Text of Automatic Rollover Amendments for SunGard Corbel Prototype Maintenance Plan Subscribers
Excerpt: "As a subscriber of our Prototype Maintenance Plan, we are providing you with amendments and other materials in a Microsoft® Word file that you may use to comply with the new automatic IRA rollover requirements. These rules apply to plans that require distributions of amounts of $5,000 or less without participant consent (i.e., mandatory distributions)." (SunGard Corbel)
Employee Ownership Update for February 1, 2005
In his 'Employee Ownership Update' for February 1, NCEO Executive Director Corey Rosen discusses the prospects for employee ownership legislation, the trend for ESOP companies to be 100% ESOP-owned, and the question of whether broad-based equity compensation plans (like stock options) will survive. (National Center for Employee Ownership)
Aging, the World Economy and the Coming Generational Storm (PDF)
28 pages. Excerpt: "The United States is about to experience the greatest demographic change in its history. Most of this change will occur over the next 30 years, as 77 million baby boomers cease to work and pay payroll taxes and instead start to retire and collect benefits. Even more dramatic population aging will occur in the European Union and Japan, where the burden of paying state pension and health care benefits for the elderly presents an even greater challenge." (National Center for Policy Analysis)
Democrats Claim Votes to Halt Bush's Social Security Plan
Excerpt: "Senate Democrats said yesterday that they have more than enough votes to block President Bush's bid to allow private accounts in Social Security, increasing pressure on the president to begin outlining a plan tonight that might offer enough compromises or incentives to win over at least a handful of Democrats." (The Washington Post; one-time registration required)
Social Security Debate Keeps Evolving with Coverage and Benefit Issues Discussions
Excerpt: "The News Journal printed a letter headed 'Bring government workers to program.' The letter stated that having federal, state and county employees pay into Social Security would be a major improvement in resolving the funding problem. As a newspaper it would seem that there should have been a note giving the facts on the matter. The pertinent facts are: 1) Public Law #98-21, enacted in 1983, placed members of Congress and all new federal employees under Social Security; and 2) ...." (DelmarvaNow)
Opinion: Bush's 'Ownership Society' Neglects Common Good, Critics Say
Excerpt: "The question of whether Social Security should be viewed as a wealth-generation tool that maximizes returns or as a backstop insurance plan designed largely to ward off destitution is at the core of the debate. 'You need to get back to the question of what Social Security was intended to do,' said David O'Brien, .... 'It was designed as a pension plan that protects all of us -- it was for the common good and not just for each individual in the system.'" (National Catholic Reporter)
Opinion: Social Security Reform, Revised for 2005 (PDF)
58 pages. Excerpt: "Featuring statistics, graphs, and accessible descriptions of how Social Security works, who it affects, and the debate about its future, this pamphlet has long been a popular resource for straightforward information about the program. This edition features a new final chapter on how the current drive to privatize the program would jeopardize Social Security's financial health and endanger the prospects for a secure retirement for millions of working Americans." (The Century Foundation)
Opinion: Saving Social Security with Stocks-- The Promises Don't Add Up (PDF)
40 pages. Excerpt: "Interest has been growing in public policy circles in replacing, partially or completely, the existing Social Security system with a 'privatized' system of government-mandated savings. This interest was reflected in the disparate recommendations of the January 1997 report of the Advisory Council on Social Security. Under its proposals, the federal government would require workers to divert a portion of what they now pay as Social Security taxes into private savings accounts." (The Century Foundation)
Links to Items on Executive Comp, Benefits in General
Overview: Expensing Employee Stock Options— Using Good Valuation to Produce Better Plan Design (PDF)
2 pages. Excerpt: "Now that the Financial Accounting Standards Board ... has issued its much awaited revisions to FAS Statement 123 ..., employers that grant employee stock options ... need to plan how to comply with the new expensing requirements. [M]ore importantly, companies will need to understand how best to perform valuations that produce financial expense results that serve the best interests of shareholders, satisfy regulatory authorities, and pass muster with their external auditors." (Aon Consulting)
Be Careful with Deferred Compensation -- New Rules May Cost You Money Now
Excerpt: "Nonqualified deferred compensation plans must have restrictions or 'substantial risks of forfeiture' in place to qualify. .... For instance, one company's 'substantial risk of forfeiture' might be that you need to stay with the company for five years to qualify for your bonus, says Mark Luscombe, a principal federal tax analyst with CCH, a provider of tax and business law information. Another risk could be that you must meet certain performance goals to get the money." (TheStreet.com)
Regulators Consider Making Sarbanes-Oxley's 404 Less Burdensome for Small/Midsize Companies
Excerpt: "In December, the Securities and Exchange Commission (SEC) named [James Thyen] as co-chair of a new advisory committee formed to assess the impact of Sarbanes-Oxley on small and midsize public companies and whether regulators should create a different set of 404 rules for them.'Regulators consider making Sarbanes-Oxley's 404 less burdensome for small/midsize companies (Treasury & Risk Management)
Newly Posted Press Releases
PBGC Encourages Plan Sponsors To File Premiums Electronically
(Pension Benefit Guaranty Corporation (PBGC))
Domestic Partnerships and Healthcare Costs Are Changing the Employee Benefits Landscape – BLR’s Compensation.BLR.com Reports
(Business and Legal Reports, Inc.)
You call this a raise?
(Business and Legal Reports, Inc.)
Newly Posted or Renewed Job Openings
Senior Actuarial Analyst
for Conrad Siegel Actuaries
in PA
Assistant Operations Manager
for Mellon Human Resources and Investor Solutions
in NJ
Retirement Plan Administrator
for Temple-Inland
in TX
Retirement Plan Administrator
for Small TPA Firm Established in 1982
in CA
SE HM Cons. X2
for Hewitt Associates
in GA
Design Consultant Adv
for Hewitt Associates
in IL
Financial Manager Project Manager
for Hewitt Associates
in IL
Retirement Plan Consultant
for Invesmart, Inc.
in OH
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