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February 24, 2005 Today's sponsor: BeneCom Associates, LLC (Click on company name or banner to learn more.) BeneCom Associates, LLC, for one-stop benefit communications Since 1992, BeneCom has produced benefit communications, including enrollment materials, SPDs, benefit statements, newsletters and more, for companies large and small, nationwide. So if you've been looking for an independent benefit communications specialist, look no further. Click above for more information, or give us a call at (860) 674-2626, Ext. 11. We're here to help. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Death to Smoothing: Tough Regulatory Environment Another Nail in Coffin for Defined Benefit Plans Excerpt: "Like Sisyphus, who was condemned to roll a rock up a hill each day only to watch it roll back down again, pension plan sponsors can't seem to make any progress. They poured record amounts of cash into their plans -- an estimated $40 billion in 2004 on top of contributions of more than $70 billion in 2003 -- to comply with federally mandated minimum funding levels, but mediocre stock market returns, persistently low interest rates, and ballooning retiree populations mean plans are in ...." (CFO Magazine) A Case of Pension Deficit Disorder: Pension Reform May Increase Investment in Longer-Dated Bonds Excerpt: "Proposed pension reforms in the US could add significantly to demand for longer-term bonds, analysts have predicted. Talk of the proposals was one of the factors behind the rise in longer-dated bond prices earlier this month as speculators invested ahead of the actual changes." (Financial Times) Employee Benefit Program Governance — Why Should You Be Concerned? Excerpt: "Your employee benefit plans represent an expensive investment in your employees. Remember the old saying 'An ounce of prevention is worth a pound of cure.' A review such as the one described is a way for you to protect your investment and can become 'your ounce of prevention.' In addition, such a review will help your HR staff focus on core businesses knowing that the compliance aspect of the employee benefit plans is under control." (ERISAdiagnostics Inc.) Companies Making Strategic Use of 401(k) Matching Contributions: Risking Employee Retirement? Excerpt: "Companies have long recognized that when it comes to getting employees to participate in a plan, what counts most about the 401(k) is the size of the employer match. But with the future of Social Security suddenly uncertain, the employer match also acquires a moral dimension. For many people, the matching contributions will make the difference between an uncertain and a sound retirement." (CFO Magazine) IRAs and 401(k)s: How to Pick the Best Plan for Your Firm or Your Clients Excerpt: "CPAs with small business clients -- or those with decision-making responsibilities for smaller companies -- often are called upon to evaluate pension plan options. This article will help by outlining the key features of retirement plans that can be implemented by small businesses: the simplified employee pension-IRA (SEP-IRA); the savings incentive match plan for employees (SIMPLE), IRA and 401(k); the traditional 401(k); and the safe harbor 401(k)." (Journal of Accountancy Online) Overview: 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 Retirement Plan Services) Overview: Guidance on the Automatic Rollover of Mandatory Qualified Retirement Plan Distributions Excerpt: "The Department of Labor recently issued final 'safe harbor' regulations relating to the automatic rollover of certain mandatory distributions from qualified retirement plans that contain a 'cash out' feature. .... The Internal Revenue Service also issued recent guidance in Notice 2005-5 and an IRS News Flash, dated February 16, 2005, that clarifies the automatic rollover rules. The following is a summary of the most salient features of these rules." (Littler Mendelson, P.C.) Towers Perrin U.S. Legislative Tracking Charts — Retirement -- Updated February 22, 2005 (PDF) 5 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin) Examining the 'Model Two' Social Security Plan Excerpt: "A plan to shore up Social Security called 'Model Two' would remove the existing link between retirement benefits and increases in the country's overall living standard. Instead of being based on wage increases, benefits would be tied to price inflation. Prices tend to rise more slowly than wages, so future payments also would rise more slowly." (Morning Edition via National Public Radio) Competing Visions for Social Security Reform Excerpt: "President Bush's push to restructure Social Security has thrust private investment accounts to the front of the political debate, but dozens of alternative approaches to Social Security's problems have been proposed -- and many of them are receiving a second look as Congress grapples with the issue." (The Washington Post; one-time registration required) Links to Items on Executive Comp, Benefits in General Small Steps Can Go a Long Way Toward Easing the Benefits Burden on Companies Excerpt: "Neither HMOs nor HSAs nor 401(k)s nor grand government programs are likely to fix the problem of rising health-care expenses and inadequate retirement plans. But companies that look for every little advantage will fair better than those that chalk these problems up to unmanageable trends. For companies facing a benefits crisis, the modest proposals highlighted here may offer some relief." (CFO Magazine) Towers Perrin U.S. Legislative Tracking Charts — Human Resources -- Updated February 22, 2005 (PDF) 3 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors" (Towers Perrin) CFO Magazine Devotes an Entire Issue to Health Care, Retirement Plans, IT/Outsourcing, and Perks Excerpt: "CFO magazine has devoted many stories to the topic [of the cost of employee benefits], but because the problem has reached critical proportions, and because other research suggests that companies don't think they manage the problem well, we decided the time had come to devote an entire issue to the subject." (CFO Magazine) Newly Posted Events 1st Quarter 2005 Meeting of the Montana Chapter of the Western Pension & Benefits Conference in Montana on March 29, 2005 presented by Western Pension & Benefits Conference - Montana Chapter In-Pats, Ex-Pats... St. Pat's: Providing Benefits in an Increasingly Global Economy in Ohio on March 17, 2005 presented by Worldwide Employee Benefits Network (WEB) - Cleveland Chapter National Conference of State Social Security Administrators Annual Conference in Colorado on July 24, 2005 presented by NCSSSA (National Conference of State Social Security Administrators) Newly Posted Press Releases PBGC Pays Pensions At Penn Traffic (Pension Benefit Guaranty Corporation (PBGC)) Pension Focus Announces Speakers for 2005 Conference (Pension Consultants, Inc.) New Health Benefit Program Now Available For Dealership And Franchise Organizations (Dealer Benefits Network, LLC) Newly Posted or Renewed Job Openings Director, Client Services for BISYS Retirement Services in PA Account/Client Services Manager (Seattle) for Zenith Administrators in WA Account/New Business Development Manager for Zenith Administrators in WA Pension & Benefits Specialist for Benefit Consultants Group in NJ Your Total Rewards Analyst for Hewitt Associates in IL Resource Planning Leader for Hewitt Associates in IL Plan Administrator for The Allocation Company, Inc. in TX Benefits Administrator for WT Benefits. L.L.C. in TX Handy Links:
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