| BenefitsLink Retirement Plans Newsletter |   |
February 17, 2005
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Text of IRS Newsletter: Plan Amendments to Comply with New Automatic Rollover Provisions; Operational Deadline vs. Amendment Deadline
February 16, 2005 'News Flash.' Excerpt: "Except as otherwise provided in Notice 2005-5 for governmental plans and certain non-electing church plans qualifying for a delayed compliance date and in the transition relief in Q&A-9, plans must operationally comply with the requirements of section 401(a)(31)(B) beginning on March 28, 2005." (Internal Revenue Service)
Overview: Qualified Retirement Plan Cash-Out Rules Change on March 28, 2005
Excerpt: "An amendment will be necessary for most qualified retirement plans, and must be executed no later than the last day of the plan year that overlaps March 28, 2005 (i.e. by December 31, 2005 for calendar year plans). The amendment will be retroactive to March 28, 2005, so you need to think through the issues before that earlier date. Because the amendment will be fairly straight-forward, you may as well adopt it by March 28, 2005, rather than waiting until the end of the year deadline." (theworkplace.biz via Rackemann, Sawyer, & Brewster)
Overview: Automatic Rollover Rule -- Special Application to Governmental Plans (PDF)
2 pages. Excerpt: "[T]he IRS published guidance making it clear that the automatic rollover rules adopted by Congress in 2001 do apply to governmental plans. These rules apply to 'mandatory distributions' by governmental plans made after the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins on or after January 1, 2006." (National Council on Teacher Retirement)
Bush May Push for Higher Taxes for Social Security on Those Who Earn More Than $90,000 a Year
Excerpt: "President Bush ... says he has not ruled out raising taxes on those who earn more than $90,000 a year to help bolster Social Security ...'s finances." (AP via Yahoo! News)
Greenspan Backs Idea of Private Accounts in Social Security for Retirement
Excerpt: "Alan Greenspan, the Federal Reserve chairman, gave his blessing on Wednesday to the creation of individual investment accounts in Social Security but expressed unease that the change could lead to trillions of dollars in additional government borrowing in the next few decades." (The New York Times; one-time registration required)
Solo 401(k)s Worth the Trouble for the Self-Employed
Excerpt: "The paperwork is a hassle. But the payoff is worth it -- for my wife, Georgina, and me, thousands of extra dollars in our pockets each year for about half an hour of calculations and filling out forms each month. I'm not talking about any get-rich-quick scheme. I am talking about a growing but still little known tax-deferred retirement plan, the 401(k) for the self-employed." (Humberto Cruz via Los Angeles Daily News)
Plan Administrator Didn't Violate ERISA by Using Old Mortality Tables to Calculate Lump Sum Payout
Excerpt: "A plan administrator did not abuse its discretion when using older mortality tables in calculating a lump sum to be rolled over into a 401(k) plan from a defined benefit scheme. US District Judge Ann Montgomery of the US District Court for the District of Minnesota has granted a summary judgment in the case brought against Blandin Paper Co., which in January 2003 terminated its defined benefit pension plan and created a 401(k) plan." (PLANSPONSOR.com; one-time registration required)
Report of Proposal: Sensible Funding Rules to Stabilize Pension Benefits (PDF)
22 pages. Excerpt: "[T]he Bush administration recently proposed changes to funding rules. However, the proposed changes would likely make matters worse for beneficiaries, hastening the demise of pension plans. Alternative funding rules proposed below could improve the security of benefits without increasing the burden for the PBGC, while at the same time providing more certainty and stability for employers." (Center for American Progress)
UK Closes Bankrup.tcy Pension Loophole
Excerpt: "A legal loophole which allowed UK companies to avoid their pension fund liabilities by filing for insolvency closed this week, meaning creditors can expect less money from insolvent companies in future, analysts say." (Reuters)
ASPPA Comments to DOL on Full Disclosure to Plan Fiduciaries of All Costs Payable Out of Plan Assets
Excerpt: "ASPPA strongly supports full disclosure to plan fiduciaries of all costs payable out of plan assets. Such disclosure should provide plan fiduciaries with a simple, easy-to-understand statement of the costs as well as a description of the services to be provided by the plan provider or providers." (American Society of Pension Professionals & Actuaries)
Opinion: Lessons Learned from Britain's Private Retirement Plan
Excerpt: "If the Bush administration creates private retirement accounts, it won't be alone. The British were among the first to take the plunge, and it hasn't turned out the way many expected." (Morning Edition via National Public Radio)
Retirement Planning Investment Strategies for the Risk-Averse
Excerpt: "[O]ne kind of risk disappears and another kind of risk will replace it. Put all your money in FDIC-insured CDs ... and you will eliminate market risk. Unfortunately, it will be replaced by inflation risk. While money market fund, CD and short-term Treasury yields have risen in the last year, most are still well below the rate of inflation. Basically, you can eliminate market risk only by accepting a slow loss of purchasing power. .... It's also why asset managers urge diversification." (Scott Burns via The Dallas Morning News; one-time registration required)
Bill Could Cut Lifetime Annuity Taxes
Excerpt: "If enacted, S. 381 would waive federal taxes on half of the income generated by a lifetime annuity, up to a maximum of $20,000 annually. For the typical retiree, the bill could provide a tax break of up to $5,000. The sponsors of the bill are Sens. Gordon Smith, R-Ore., and Kent Conrad, D-N.D., in the Senate and Reps. Nancy Johnson, R-Conn., and John Tanner, D-Tenn., in the House." (National Underwriter)
Links to Items on Executive Comp, Benefits in General
Hewitt's Federal Legislation Quick Guide Updated as of February 15, 2005
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates)
Newly Posted Events
Advanced HSAs Telephone Seminar
Nationwide on July 26, 2005
presented by BISYS Retirement Services
Basic HSAs Telephone Seminar
Nationwide on July 12, 2005
presented by BISYS Retirement Services
Basic IRAs Telephone Seminar
Nationwide on July 14, 2005
presented by BISYS Retirement Services
Certificate Series - Basic Compensation Concepts
in Wisconsin on June 21, 2005
presented by International Foundation of Employee Benefit Plans
Certificate Series - Choice-Based Benefits
in Wisconsin on May 18, 2005
presented by International Foundation of Employee Benefit Plans
Certificate Series - Health Benefit Plan Basics
in Wisconsin on May 12, 2005
presented by International Foundation of Employee Benefit Plans
Certificate Series - Health Care Cost Management
in Wisconsin on May 16, 2005
presented by International Foundation of Employee Benefit Plans
Certificate Series - Total Compensation and Organizational Strategies
in Wisconsin on June 27, 2005
presented by International Foundation of Employee Benefit Plans
Certificate Series - Variable Pay
in Wisconsin on June 23, 2005
presented by International Foundation of Employee Benefit Plans
Certificate Series--Global Benefits Management
in Illinois on May 9, 2005
presented by International Foundation of Employee Benefit Plans
Defined Care 2005 Web Summit
Nationwide on April 11, 2005
presented by Healthcare Web Summit
Essentials of Multiemployer Trust Fund Administration
in Wisconsin on June 6, 2005
presented by International Foundation of Employee Benefit Plans
How To Grow Your Retirement Plans Business Part III: Marketing Advisory Services Instead Of Product
in Illinois on October 4, 2005
presented by Center for Due Diligence
HSAs: Where We Are Now
Nationwide on February 24, 2005
presented by Healthcare Web Summit
IRA to IRA Transfers and Rollovers Telephone Seminar
Nationwide on July 21, 2005
presented by BISYS Retirement Services
IRA Update Telephone Seminar
Nationwide on July 6, 2005
presented by BISYS Retirement Services
Portfolio Concepts and Management
in Pennsylvania on May 10, 2005
presented by International Foundation of Employee Benefit Plans
Trustees and Administrators Institutes
in Nevada on June 13, 2005
presented by International Foundation of Employee Benefit Plans
Washington Legislative Update
in District of Columbia on May 16, 2005
presented by International Foundation of Employee Benefit Plans
Newly Posted Press Releases
In-the-Money Value of CEO Stock Options Soared in 2004, Watson Wyatt Analysis Finds
(Watson Wyatt)
American Benefits Council Releases Recommendations for Defined Benefit Pension Plan Funding Reform
(American Benefits Council)
Audio Conference: HSAs: Where We Are Now, February 24th, 2005
(MCOL)
New Catalog Offers Variety of Employee Benefits and Compensation Resources
(International Foundation of Employee Benefit Plans)
Fiserv Investment Support Services Offers Mandatory Rollover IRA in Advance of March 28 Deadline
(Fiserv, Inc.)
NBCH Announces Key 2005 Programs Emphasizing Strategies for Improving Health Care Value and Effectiveness
(National Business Coalition on Health)
Vertafore Benefits Unveils Software Application for Employee Benefits Brokers and Agents
(Vertafore Benefits)
Tandem Benefits Expanding Operations - Names Two Additional Principals
(Tandem Benefits)
Newly Posted or Renewed Job Openings
Chief Compliance Officer
for Invesmart, Inc.
in PA
Enrolled Actuary
for National Life Insurance Company
in VT
Regional Sales Director
for BISYS Retirement Services
in CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VT
Marketing Consultant
for MassMutual Financial Group
in MA
Handy Links:
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