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February 16, 2005
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Annuity Tax Break Bill Reemerges in New Congress
Excerpt: "A bipartisan Congressional group has reintroduced a bill giving Americans tax incentives to buy annuities for retirement savings. A news release from the Americans for Secure Retirement - an advocacy group supporting the use of annuities as retirement savings vehicles - said The Retirement Security for Life Act was introduced Tuesday in both the US House of Representatives and the US Senate." (; one-time registration required)

Overview: Dramatic Pension Funding Changes for Single-Employer Plans Proposed
Excerpt: "Long-expected pension funding changes may be on the horizon. Revamping the pension funding rules for single-employer pension plans is one of three key elements in the Bush Administration's plan for dealing with defined benefit plan funding problems and reported threats to the long-term solvency for the Pension Benefit Guaranty Corporation (PBGC), which reported a record deficit of $23.3 billion for private, single-employer pension plans in 2004 ...." (The Segal Company)

Overview: Qualified Plans Must Be Amended in Response to New Automatic Rollover Rules (PDF)
Pages 1-3 of 4 pages. Excerpt: "The Economic Growth and Tax Relief Reconciliation Act of 2001 ('EGTRRA') included a provision requiring qualified pension plans to automatically rollover mandatory distributions of more than $1,000 and less than or equal to $5,000 to an individual retirement plan such as the IRA, unless the distributee affirmatively elects to have the distribution paid in a direct rollover to an eligible retirement plan or to take a direct distribution." (Snell & Wilmer)

American Retirement Increasingly Rides the Market As Both State and Private Retirement Plans Shift
Excerpt: "As Americans increasingly focus their attention on the future of Social Security, a growing number of states and companies are also looking at the health of their own retirement plans - and pushing further away from traditional paid benefits in favor of models more akin to President Bush's." (The Christian Science Monitor)

Illinois Governor Will Offer Plan to Solve State's Pension Crisis
Excerpt: "Gov. Rod Blagojevich today will lay out his plan for solving the nation's worst state-government pension crisis, with a solution that could put him in hot water with one of his most important constituencies: organized labor. Administration officials say Blagojevich's annual budget address, ..., will recommend major changes in the pension system that covers retired state employees, including cuts to the retirement benefits of employees who haven't been hired yet." (St. Louis Post-Dispatch)

Schwarzenegger's Pension Plan Weathers New Opposition at CalPERS
Excerpt: "The ... California Public Employees Retirement System [board] was expected to defy Gov. ... Schwarzenegger's plan to privatize the state's pension systems .... A CalPERS board dominated by Democrats and union officials was set to vote Wednesday in the wake of a recommendation by a key CalPERS committee that it reject Schwarzenegger's plan to make new public employees use a 401(k)-style investment plans ...." (AP via The Mercury News; one-time registration required)

Reimbursement for Mutual Fund Trading Abuses of Concern for Employers
Excerpt: "Employers that have determined that their plans deserve restitution need to stay on top of the fund companies. In the wake of recent revelations that trading abuses at Putnam Investments cost investors about $100 million, the retirement plan providers that offered funds named in the scandals are starting to have discussions about how much they should be reimbursed." (Workforce Management)

Abstract of Working Paper: International Social Security, Demographic Trends, and Economic Growth
Excerpt: "The worldwide problem with pay-as-you-go (PAYG) social security systems isn't just financial. This study indicates that these systems may have exerted adverse effects on key demographic factors, private savings, and long-term growth rates." (National Bureau of Economic Research)

Social Security Administration's Database of Those Qualified for Private Pension Plan Benefits
Excerpt: "Social Security keeps a database of individuals who have been identified by the Internal Revenue Service as having qualified for pension benefits under private retirement plans. This database is maintained by SSA under the 1974 Employee Retirement Income Security Act (ERISA) which was enacted to protect the pension benefit right of workers. Under the provisions of ERISA, SSA notifies claimants applying for Social Security benefits of any information SSA has on file about their ...." (Social Security Online)

Treasury Experts Split on Social Security Plan; and, a Review of Treasury Department Research Papers
Excerpt: "The Bush administration's political appointees and career economists are divided over whether to transform Social Security into a system of private retirement accounts. The conflict emerged last week when Edward Prescott, a winner of the Nobel Prize in economics, briefed Treasury Department economists to discuss Social Security privatization as part of the department's effort to build support for its plan in academia and on Capitol Hill." (The Hill)

Opinion: Two Financial Futures for Social Security As Drawn by 'The Templeton Curve'
Excerpt: "The 'Templeton Curve,' shown below, depicts two financial futures for Social Security. The first is the 'do nothing' scenario in which we pretend the program is in fine shape and that only minor tinkering will be required when baby boomers retire. ....' As we can see from the chart, if we choose the 'do nothing' option, the program runs surpluses for another dozen years, hits the fiscal quicksand in 2018, and sinks deeper into debt in every succeeding year." (National Review Online)

Greenspan Will Have Ears of All Parties in Social Security Debate
Excerpt: "Among the targets of President Bush's campaign to promote Social Security restructuring is a potentially critical constituency of one: Federal Reserve Chairman Alan Greenspan. White House officials have met with Greenspan in recent weeks to discuss their restructuring initiative. Some advisors say his seal of approval would reassure lawmakers concerned about the borrowing needed to finance Bush's plan to let younger workers create personal investment accounts." (Los Angeles Times; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Global Employee Share Plans: February 2005 Legislative News on Stock Options
This edition includes articles on the following countries: Denmark: Intel judgment affects prior stock option grants; France: New and improved tax concessions for employee stock; Hong Kong: Clarification of the prospectus filing requirement; Japan: Taxation of stock options clarified; Mexico: Income tax treatment (somewhat) clarified; Netherlands: Change in the taxation of stock options; and, Slovenia: New capital gains tax concession for stock. (Mercer Human Resource Consulting; one-time registration required)

Newly Posted Events
(Post Yours!)

How to Investigate and Defend Harassment and Discrimination Claims and Comply with California's New Mandatory Training Requirements
in California on February 22, 2005
presented by Precept Human Capital Management

How to Investigate and Defend Harassment and Discrimination Claims and Comply with California's New Mandatory Training Requirements
in California on February 23, 2005
presented by Precept Human Capital Management

SPARK Accredited Retirement Plan Consultant (ARPC) Training and Designation Program
in Massachusetts on March 29, 2005
presented by SPARK - the Society of Professional Administrators and Recordkeepers

Today's Health & Wellness Initiatives - One Employer's Story
in Illinois on February 24, 2005
presented by WEB - Chicago West

WEB Benefits Solutions Conference
in Illinois on April 14, 2005
presented by Worldwide Employee Benefits Network (WEB)

Newly Posted Press Releases
(Post Yours!)

PensionOnline Announces Professional Services Technology Group
(Metrics Partners)

401(k) Provider Offers Lowest Cost Investments to Small Employers, TPAs Hammers participant costs; rejects revenue-sharing, asset-based fees
(Employee Fiduciary Corporation)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Retirement Plan Manager
for San Diego Based Plan Administrator.
in CA

Employee Benefits Plan Specialist 1
for Union Bank of California
in CA

Retirement Plan Administrator
for CDM Retirement Consultants, Inc.
in MD

Participant Support Representative
for Decimal, Inc. (
in CA

Benefits Administrator
for Phillips-Van Heusen Corporation
in NJ

Production Manager
for The ANGELL Pension Group, Inc.
in RI

Sales and Services Specialist
for Principal Financial Group
in CA

VP Sales - Retirement Services
for Principal Financial Group
in PA

Pension Administrator
for Flynn, Shojinaga & Associates, Inc.
in CA

Sr. Professional-Benefits Administration
for DTE Energy
in MI

Health Insurance Specialist
for Centers for Medicare & Medicaid Services, HHS
in DC, MD, VA

Retirement Services Implementation Specialist (Bi-lingual/Spanish) Northern California
for ADP Retirement Services
in CA

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Copyright 2005, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

Published by:, Inc.
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Fax: (407) 644-2151

Editor and Publisher: David Rhett Baker, J.D.

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