| BenefitsLink Retirement Plans Newsletter |   |
February 18, 2005
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Putting too Much Stock in Your Company –- A 401(k) Problem
Excerpt: "NASD is issuing this Alert because it is concerned that employees who have the opportunity to invest in company stock may be concentrating too much of their retirement savings in a single security. NASD is particularly concerned about employees who have all or most of their 401(k) assets in their employer's stock. If the stock takes a beating, so does your retirement savings." (NASD)
American Benefits Council Says Better Defined Benefit Plan Funding Status Disclosure Needed
Excerpt: "A benefits industry trade group on Thursday took direct aim on the Bush Administration's recently unveiled pension reform plan, charging that proposed pension system changes would actually hurt a lot more than it would help. In a report entitled Funding our Future: A Safe and Sound Approach to Defined Benefit Pension Plan Funding Reform, the American Benefits Council (ABC), asserted that a series of problems with the Administration's plan 'would result in far fewer defined ....'" (PLANSPONSOR.com; one-time registration required)
Point: ABC Proposal Is Safe and Sound Approach to Defined Benefit Pension Plan Funding Reform (PDF)
32 pages. Excerpt: "The report offers an employer perspective on the steps needed to address the challenges of underfunded plans and also critiques the Bush Administration's proposed response." (American Benefits Council)
Counterpoint: No, It's Not! --DOL Secretary Elaine Chao
Excerpt: "[T]he report fails to recognize the reality that the pension funding rules are broken, causing workers and retirees harm and putting taxpayers at risk." (U.S. Department of Labor)
Overview: IRS Provides Automatic Rollover Guidance for Qualified Retirement Plans (PDF)
5 pages. Excerpt: "This guidance affects sponsors of and participants in qualified defined benefit and defined contribution plans that currently have an automatic cash-out provision, including multiemployer plans, state and local governmental plans, and non-electing church plans. It also affects governmental section 457(b) plans and 403(b) plans or programs that provide for automatic cash-outs. These rules do not apply to non-governmental section 457(b) plans." (Prudential Retirement)
Guide to Mandatory Rollovers of Small Balance Cash-Outs (PDF)
2 pages. Excerpt: "On Sept. 28, 2004, the Department of Labor (DOL) issued its final regulations providing the safe harbor requirements that, if met, will be deemed to comply with these rules. The IRS issued additional guidance related to this topic at the end of December, which is also reflected in this article." (Employee Benefit News via Mellon Financial Corporation)
Anglicans Recognize G.ay Partner Pension Rights, but Still Have Issues with Homose.xuality
Excerpt: "The Church of England synod this week ... ruled that partners of g.ay clergy must be given the same pension rights as other spouses. However, those who register could risk losing their jobs because the Church of England, in theory, bars se.xually active g.ays and les.bians from joining the priesthood." (PlanetOut Interactive Services)
Text: Retirement News for Employers, Winter 2005 Edition (PDF)
10 pages. The issue includes articles titled: Good Business and Good Tax Planning, Too; Retirement Savings Contribution Credit; Small Business Week 2005; The Fix Is In: Common Plan Mistakes; Product Profile - Choosing a Retirement Solution for Your Small Business Publication; Tax Law is Complex but We Can Help; There's No Need to Panic; The Filing Cabinet; DOL News." (U.S. Internal Revenue Service)
Analysis: Removing the Social Security Earnings Cap Virtually Eliminates Funding Gap
Excerpt: "Until recently, President Bush had signaled opposition to any revenue increase to close [the Social Security trust fund revenue] shortfall. On February 16, however, President Bush indicated his willingness to consider raising the cap on income subject to the Social Security tax. SSA actuarial estimates show that eliminating the cap would virtually eliminate the projected 75-year funding shortfall." (Economic Policy Institute)
Eliminating Wage Cap Means System Would Continue to Collect More than It Paid Out until 2025
Excerpt: "Increasing Social Security taxes for the wealthiest Americans could raise more than $100 billion a year - enough to shore up the retirement system's finances for 75 years, pay for President Bush's plan for private accounts, or part of each. .... Raising taxes, even if on the rich, is a risky political proposition. Both Republicans and Democrats distanced themselves from the idea Thursday." (The Washington Times)
Links to Items on Executive Comp, Benefits in General
What Are the Current Problems with Executive Compensation Disclosure?
Excerpt: "It's next to impossible to know for sure how much executives make in total compensation. This inability to get accurate readings on executive pay comes as many investors think spiraling CEO pay has become dangerously delinked from performance." (The Wall Street Journal via Pittsburgh Post-Gazette)
Overview: Changes to the Internal Revenue Code's Definition of Dependent
Excerpt: "In October of 2004, the President signed the Working Families Tax Relief Act of 2004 which revised the Internal Revenue Code's definition of 'dependent.' The revisions sought to create uniformity in the definition for purposes of personal exemptions, certain federal tax credits, and the head of household filing status." (Ballard Spahr Andrews & Ingersoll, LLP)
Details of IRS Commissioner's January 28 Speech Emphasizing IRS Enforcement Focus
Excerpt: "Steven Miller .... [b]egan his speech with a statement that he had come to discuss 'how the Employee Plans office of TE/GE needs to change in order to ensure that the IRS is effective in the future in its mission of promoting and protecting retirement benefits.' Here are some excerpts from his speech, capturing some of his thoughts on how the IRS will seek to bolster its enforcement programs: ...." (Attorney B. Janell Grenier via BenefitsBlog.com)
Newly Posted Events
Defined Contribution/401(k) East Coast Conference
in Florida on February 24, 2005
presented by Pensions & Investments/International Business Forum
Targeting Work/Life Benefits
in Massachusetts on March 16, 2005
presented by Worldwide Employee Benefits Network (WEB)
Newly Posted Press Releases
WMSI To Provide ADP Retirement Services with Small Balance Rollover Program and IRA Services from E*TRADE
(Wealth Management Systems Inc. (WMSI))
Newly Posted or Renewed Job Openings
Plan Administrator
for Fortune Benefits, Inc.
in GA
Retirement Services Implementation Specialist
for ADP Retirement Services
in FL
Retirement Plan Consultant
for Invesmart, Inc.
in CA
Retirement Services Sales Representative
for MassMutual Financial Group
in MN
Handy Links:
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- Search BenefitsLink
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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