| BenefitsLink Retirement Plans Newsletter |   |
February 14, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
FREE for 2005: 5500 / PBGC / 1099-R / 5300 Software from DATAIR DATAIR is making an incredible offer: Get our Pension Reporter System now for next year’s 5500s, PBGC Forms, 1099-Rs and 5300 series forms and pay NOTHING! No license fee; no monthly support fees; no obligation. We will provide all updates and DATAIR’s excellent support, FREE until October 31, 2005. For details and to receive your free copy of Pension Reporter, click the banner above, visit www.datair.com/register or call 1-888-DATAIR4 (328-2474).
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
IBM 401(k) Disability Plan Insures Contributions
Excerpt: "As IBM moves its retirement plan to a defined-contribution model, the company is offering its employees a one-of-a-kind disability insurance that will cover plan contributions if a worker is disabled. IBM added the disability insurance option last year, says company spokeswoman Kendra Collins. .... This type of disability insurance could be an important benefit as more companies shed their pension plans for 401(k)s." (Employee Benefit News)
Government Scrutiny of 401(k) Fees Is Likely
Excerpt: "Defined contribution fee disclosure requirements, which haven't significantly changed since the 1970s, may be getting a facelift as federal regulators look to increase plan sponsor and participant awareness. Under the Employee Retirement Income Security Act, plan fiduciaries have the obligation to choose a fund menu in which the fees must be at a reasonable level given the services and their quality. Yet, it's not an issue 'on the radar screen of most plan sponsors,' ...." (Employee Benefit News)
The K-Plan for the Lazy Man
Excerpt: "There is much evidence that 401(k) plans will work for workers who invest wisely, faithfully, and over many years. But there is also much evidence that many workers don't. Automatic enrollment for new workers, which the Internal Revenue Service recently endorsed, can help with the time element. And advisers like Financial Engines may be able to help with the wisdom part." (The Washington Post; one-time registration required)
Overview: IRS Clarifies Meaning of Prior Memorandum on Discriminatory 401(k) Plan Design
Excerpt: "[I]t is important to remember the underlying rule that allows the IRS to question whether plans that meet the mechanical nondiscrimination tests might still be discriminatory: The regulations under Code Section 401(a)(4) provide that they must be interpreted in a reasonable manner consistent with the purpose of preventing discrimination in favor of HCEs." (Employee Benefits Institute of America Inc.)
Opinion: Pension Deficit Disorder
Excerpt: "Ron Ryan chuckles. 'These aren't common-sense rules – that's why we call them preferred-sense rules,' he says. The subject of that Wall Street joke is the incredibly arcane accounting rules that govern how corporate and public pension plans report their financial condition." (The Dallas Morning News; one-time registration required)
Letter to IRS Following Discussion on Issues of Amortization Relief for Multiemployer Plans (PDF)
1 page. Excerpt: "As discussed, some multiemployer plans are facing funding deficiencies that could be relieved if granted an extension under 412(e). However, because of issues related to the low statutory interest rate that applies to the determination of payments during the extension period, those plans that have filed applications (between 20 and 30) have not been given any guidance as to if, and/or when, they would be granted such relief." (American Academy of Actuaries)
Principles of Pension Funding Reform for Multiemployer Plans (PDF)
12 pages. Excerpt: "Defined benefit pension plans are an important source of retirement income to the American worker, and they provide guaranteed lifetime pension benefits. Defined benefit pension plan sponsors are of three basic types: private sector single-employer plans covering employees at a single company, public sector pension plans that cover government employees, and multiemployer plans that cover employees within an industry or trade." (American Academy of Actuaries)
Now Available Online via a Secure Web Connection: The Inte-Greater
Our site's contribution to the employee benefits community, the Inte-Greater is a free online web application that will find the 'best' integration formula for a corporation's profit-sharing plan, from the perspective of one or more employees (e.g., the owner) whom you designate as being 'favored.' Now uses a 'secure' web connection (data is scrambled when sent to and from your web browser), to protect confidentiality. (BenefitsLink.com, Inc.)
Comments: Sixth Circuit Case Illustrates How Plan Overpayments Can Be Difficult to Correct
Excerpt: "A recent Sixth Circuit case--Ramsey v. Formica Corp.--illustrates how painful it can be to unravel errors made by plan administrators in making payments to retirees. The saga in this case apparently began with an audit of the pension plan in question which revealed that certain retirees had, for a period of between eight and seventeen years, been receiving monthly amounts which exceeded what they were entitled to under the plan." (Attorney B. Janell Grenier via BenefitsBlog.com)
IRA Distributions to Nonresident Aliens: A Separate Income Tax Withholding Process
Excerpt: "This article presents a review of the basic federal income tax withholding rules for traditional IRA and SIMPLE IRA distributions; examines some of the duties and responsibilities of an IRA custodian/trustee as they apply to IRA distributions to nonresident aliens; and ends with a summary of references and other available information on income tax withholding." (Bankers Systems, Inc.)
Comments on Proposed Regs on Distributions from Pension Plans Under Phased Retirement Programs (PDF)
4 pages. Excerpt: "Although the proposed regulations deal with one important aspect, that of phased retirement, they do not address the related issue of large numbers of employees who retire from their current employment solely to access their pensions in full, even though they plan to continue working. Many of these employees retire from their current employers, claim retirement benefits and then seek other employment or reemployment as a consultant." (American Academy of Actuaries)
Research Study: Understanding Expenditure Patterns in Retirement (PDF)
35 pages. Excerpt: "Understanding the consumption needs of retirees is critical to assessing the adequacy of retirement income and the possible impact of Social Security reform on older Americans. This study uses data from the Health and Retirement Study, including a supplemental expenditure survey, to analyze spending patterns and consumption needs for adults ages 65 and older." (The Urban Institute)
Maximum Benefit and Contributions Limits for 2000-2005 As published by the Internal Revenue Service
Chart covers retirement plans. (PLANSPONSOR.com; one-time registration required)
Sweden's Take on Private Pensions Similar to Bush's Private Accounts
Excerpt: "[S]weden introduced its private pensions system by placing a state-appointed intermediary, the Premium Pensions Authority, between savers and fund managers, much as President Bush is proposing to do. Moreover, Sweden created a state-administered default account, comprising foreign and Swedish equities, for people who did not want to choose their own investments. But in seeking a highly competitive program, Sweden threw open its private accounts system to a staggering 675 funds ...." (The New York Times; one-time registration required)
Social Security: Three New Ideas -- As the National Debate Rages On, It's Time for Fresh Thinking
Excerpt: "The principal economic idea behind President George W. Bush's proposal for private Social Security accounts is to tap the power of the stock market. After all, the Social Security Trust Fund consists solely of government bonds whose returns have historically lagged those of stocks. But there could be a better way to achieve the same goal: Keep the current setup but invest some of the Trust Fund in stock market index funds." (BusinessWeek Online)
Survey of Baby Boomers' Expectations for Retirement
Excerpt: "This survey, conducted 5 years after AARP's 1998 benchmark study of baby boomers' expectations of retirement, investigated how this massive generation and the various segments within it have progressed in their planning and preparedness for retirement. [Target page has links to Key Findings (12 pages), Full Report (133 pages), Slide presentation (79 pages).]" (AARP)
Opinion: Council of Economic Advisors Flunks the No Economist Left Behind Test (PDF)
2 pages. Excerpt: "Last week the President's Council of Economic Advisors (CEA) issued a memo that responded to the concern that the Social Security Administration's (SSA) projections for stock returns are inconsistent with its projections for economic and profit growth (2-4-05). The basic problem is that the projections assume that stock returns will be roughly the same in the future as they were in the past, 6.5 percent annually, even though real profit growth is projected to be only ...." (Center for Economic and Policy Research)
Opinion: The Flaw in Bush's Personal Accounts in Social Security Plan
Excerpt: "The Bush budget policy continues to be awful. But the recent proposal for personal accounts in Social Security is at least half-excellent. If the administration can show the flexibility to recant one key error, it may deserve to win the coming battle in Congress." (The Washington Post; one-time registration required)
Opinion: Another Irrefutable Argument Against Privatizing Social Security
Excerpt: "Try to forgive my obsession, but here is another proof that President Bush's designs for Social Security cannot work. This one's not mine. I first heard it from the actor and liberal activist Rob Reiner. Like the argument I have been hawking (see www.latimes.com/proof), this one doesn't merely suggest that Bush is making bad policy. It demonstrates with near-mathematical certainty that the idea he endorses can't work. Period." (Michael Kinsley via The Washington Post; one-time registration required)
Opinion: The Amazing Disappearing Social Security Trust Fund
Excerpt: "President Bush slipped something new into his Social Security pitch on Wednesday. And it was there again twice yesterday. He says Social Security's $1.8 trillion trust fund doesn't really exist." (The Washington Post; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Sarbanes-Oxley Has New Dimensions for Internal Probes at Health Care Entities
Excerpt: "The Sarbanes-Oxley Act has raised the stakes for internal investigations at health care entities, which are already required and/or encouraged to perform them by a variety of state and federal regulators." (REPORT ON MEDICARE COMPLIANCE via AISHealth.com)
Newly Posted Events
February Brown Bag Luncheon
in Kentucky on February 22, 2005
presented by ASPPA Benefits Council of Greater Cincinnati
Financial and Retirement Planning Education and Advice: The Value to an Organization and Its Employees
Nationwide on February 24, 2005
presented by International Foundation of Employee Benefit Plans
IRA Beneficiary Distributions Telephone Seminar
Nationwide on June 16, 2005
presented by BISYS Retirement Services
IRA Compliance Telephone Seminar
Nationwide on June 7, 2005
presented by BISYS Retirement Services
Newly Posted Press Releases
PBGC Deal Strengthens Pensions At Crown Central Petroleum
(Pension Benefit Guaranty Corporation (PBGC))
U. S. Labor Department Extends Annual Reports Deadline After Severe Storms and Flooding Hit California
(U.S. Department of Labor, Office of Public Affairs, San Francisco, Calif.)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Mary Read CPC, QPA
(Feldman Benefit Services, Inc.)
David Bowden, CEBS, CMS, RPA
(Leggette Actuaries/Consultants)
Kenneth D. Wilke
(Leggette Actuaries/Consultants)
Newly Posted or Renewed Job Openings
Benefits Service Manager
for Hewitt Associates
in IL, WI
Client Services (CST) Quality Analyst
for ICMA Retirement Corporation
in DC
Senior Manager
for Zenith Administrators, Inc.
in CA, WA
Pension Administrators
for The Pension Service, LLC
in MA
Defined Benefit Specialists
for Constantin Control Associates
in MA
Senior Consultant
for MK Consulting, Inc.
in ANY STATE
Retirement Plan Administrator (Defined Contribution)
for Benefit Administration Company, LLC
in WA
New Business Consultant (Regional)
for Emjay Retirement Services, A Great-West Company
in CA, CO, NV, UT, WA, WY
Regional Sales Manager
for RSM McGladrey, Inc.
in IL, NY
Retirement Plan Administrator/Consultant
for Virchow Krause & Company
in WI
Conversion/Compliance Specialist
for Retirement Benefit Solutions, LLC
in VA
Benefits Manager
for YALE UNIVERSITY - Employee Benefits Department
in CT
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: