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March 2, 2005
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Overview: IRS Issues News Flash that Highlights Complexities of Automatic Cashouts for Plan Sponsors
Excerpt: "On February 16, 2005, the Internal Revenue Service (IRS) issued a News Flash regarding plan amendments intended to comply with the new automatic rollover provisions. .... The News Flash addressed three major points, ...." (McDermott Will & Emery LLP)
Guide to Mandatory Rollovers of Small Balance Cash-Outs
Excerpt: "The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) modified the rules applicable to involuntary distributions of small benefit amounts. The changes generally become effective on March 28, 2005, though different effective dates may apply for certain governmental and church plans." (Employee Benefit News)
Text: Proposed Regs on Designated Roth Contributions Under 401(k) Plans (PDF)
5 pages. Excerpt: "These proposed regulations would affect section 401(k) plans that provide for designated Roth contributions and participants eligible to make elective contributions under these plans." (Internal Revenue Service)
Employee Ownership Update for March 1, 2005
According to data from the Department of Labor's Private Pension Plan Bulletin 2004, the rate of return for ESOPs with more than 100 participants during the 1990s was about 10% better than for 401(k) plans with more than 100 participants. A new survey of ESOP diversification elections shows that they vary widely and that most ESOP participants choose not to diversify. (National Center for Employee Ownership)
Bush Pension Reform Proposals: Hold Onto Your Yield Curves It's Going to Be a Bumpy Ride
Excerpt: "If pension plan administrators didn't already think the job was exciting enough, wait until they deal with the predicted volatility from a proposed Bush overhaul." (Treasury & Risk Management)
Trade Groups Continue Attack on Bush Pension Reform Proposals
Excerpt: "In Congressional testimony [March 1, 2005], a second retirement services trade group has blasted the Bush Administration's pension reform proposal, saying it 'will reduce retirement security by making it far more difficult for employers voluntarily to sponsor defined benefit pension plans.'" (PLANSPONSOR.com; one-time registration required)
Text: Present Law & Background Re: Employer-Sponsored Defined Benefit Pension Plans and the PBGC (PDF)
81 pages. Excerpt: "The Senate Committee on Finance has scheduled a public hearing on March 1, 2005, on issues relating to defined benefit pension plan funding and the Pension Benefit Guaranty Corporation ('PBGC'). This document, prepared by the staff of the Joint Committee on Taxation, provides a description of present law and background with respect to defined benefit plans and PBGC." (Joint Committee on Taxation)
Hearing: Financial Status of PBGC and the Administration's Defined Benefit Plan Funding Proposal
Hearing held March 1, 2005, at 2:15 p.m. in 215 Dirksen Senate Office Building; Member Statements: Charles Grassley, IA and Max Baucus, MT; Witness Statements: Bradley D. Belt, Mark J. Warshawsky, Ann Combs, Larry Zimpleman, Alan Reuther, Randall S. Kroszner (U.S. Senate Committee on Finance)
White House Urges Changes to Clarify Pension Fund Valuations
Excerpt: "Senior officials of the Bush administration told a Senate panel on Tuesday that the nation's companies should use 'mark to market' values, or numbers that more closely reflect current market values, for their pension funds. Their remarks drew criticism from both business and labor representatives who testified." (The New York Times; one-time registration required)
Principles for Effective Employee Ownership are Established by Expert Committee
Excerpt: "This article discusses a set of principles for effective employee ownership that was defined in 2004 by the National Center for Employee Ownership. .... For a more detailed discussion of the principles underlying the CEEO recommendations and the work of the CEEO see http://www.nceo.org/ceeo/ceeo-principles.html" (Beyster Institute)
Briefing on Social Security Reform: How Benefits Compare under Various Options (PDF)
33 pages. Excerpt: "While 'sound bites' frequently make the Social Security discussion seem simple, you all know how complex the program is. How an individual account plan compares with other types of options cannot be answered with a simple answer such as it is better or worse. The parameters of the comparison must be specified such as: Are the benefits being compared to current law or some other option? What is the equity market return assumption and is the additional investment risk ...." (Employee Benefit Research Institute)
Commentary on Social Security: Fun with Numbers: -- Why the Math Won't Work and Other Issues
Excerpt: "Basically, it's a question about whether Social Security needs to be reformed. The question of whether it does is one of mathematics. With lengthening life expectancies, there will come a point in the future when the sums paid into the Social Security system will be less than those that must be paid out. This could happen as soon as 2018, and the reason this will happen, regardless of the timing, is simple demographics." (The Motley Fool)
Social Security Vote May Be Delayed: Critics Could Force Proposal to Change
Excerpt: "The Senate's top Republican said yesterday that President Bush's bid to restructure Social Security may have to wait until next year and might not involve the individual accounts the White House has been pushing hard." (The Washington Post; one-time registration required)
Opinion: Workers, the Labor Supply and Retirement, Social Security and Private Accounts
Excerpt: "Throughout American history, the work force has demonstrated a dynamic flexibility. .... As we were taught in Economics 101, supply responds to demand -- when workers are needed, the labor supply increases to satisfy the demand. Will future history be any different? Yes, if you heed the Social Security trustees' projections for the next 75 years." (The Washington Times)
Links to Items on Executive Comp, Benefits in General
Text: Advisory Opinion 2005-02A Regarding Certain ERISA Title I Annual Reporting Requirements
Excerpt: "Regarding the Schedule A (Form 5500) requirements for reporting fees and commissions paid to brokers, agents and other persons directly or indirectly attributable to policies or contracts placed or retained with or by an ERISA-covered employee benefit plan." (U.S. Department of Labor)
Overview: Action Items in Response to IRS Guidance on Nonqualified Deferred Compensation Plans (PDF)
6 pages. Excerpt: "[I]nternal Revenue Service ... guidance, Notice 2005-1, on the deferred compensation provisions of new Section 409A of the Internal Revenue Code ... was issued on December 20, 2004 and revised on January 5, 2005. The guidance provides transition rules for 2005 for nonqualified deferred compensation plans ... that are subject to Section 409A with respect to deferral and payment elections, amendments, termination of participation, cancellation of deferrals, and plan...." (Frederic W. Cook & Co., Inc.)
Employers Survey Workers to Gauge Benefit Perceptions and to Improve Plans
Excerpt: "The top reasons for conducting a survey were gauging employee satisfaction with benefits (68%); identifying problems with benefits package, HR policies, salary structure and company culture (42%); determining how well employees understand benefits (40%); soliciting employee benefit preferences (36%); gauging benefit perceptions of different employee groups (30%); and ascertaining employees' reaction to a proposed benefit change (26%)." (BenefitNews Connect)
Newly Posted Events
Family Events: What to Do (and Not Do) When Employees Marry, Have Kids, and Divorce
Nationwide on March 17, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Form 5500 Workshop
Nationwide on April 20, 2005
presented by SunGard Corbel
Newly Posted Press Releases
SunGard Corbel’s Sixth Annual Relius Software Users Conference - Connection 2005
(SunGard Corbel)
Labor Department Testifies Before House Education and the Workforce Committee on Administration's Pension Reform Proposal
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))
Council Provides Finance Panel With Recommendations For Defined Benefit Pension Plan Funding Reform
(American Benefits Council)
Council Provides Education and Workforce Committee with Proposals for Strengthening Pension Plan Funding
(American Benefits Council)
MCOL’s Healthcare Web Summit Division To Host Fourth Defined Care 2005 Healthcare Web Summit: Fourth Annual Web Summit on Consumerism and Consumer-Driven Health Care
(Healthcare Web Summit)
Deadline Looms for Employers to Comply with Automatic 401k Rollover Rules Governing Lower Balance Retirement Accounts
(RolloverSystems)
Newly Posted or Renewed Job Openings
Conversion Specialist
for The Newport Group
in NC
Financial Transactions Specialist
for ExpertPlan, Inc.
in NJ
Director, Member Services
for The Pension Boards-United Church of Christ
in NY
Regional Sales Associate
for CitiStreet
in FL, IL
Pension Accounting and Compliance Reporting
for A Fortune 500 company located in the Southwest United States
in AZ, CA, TX
Retirement Plan Specialist
for West Los Angeles Retirement Consulting/Investment Management Firm
in CA
Plan Administrator
for Arizona Qualified Plan Services, Inc.
in AZ
Benefit Analyst - Senior
for Precept
in CA
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