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March 15, 2005
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Benefits and Compensation Glossary--the most indispensable
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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)
Make Your Nest Egg Grow Even More When You're Self-Employed with a Solo 401(k)
Excerpt: "As more workers are jumping -- or being pushed -- off the corporate ladder, a slew of new tax and savings benefits are softening their landing. The Solo 401(k) is one of the fastest-growing cushions. It is a retirement savings plan aimed squarely at the growing number of free agents running one-person companies." (THE MORNING CALL Inc.)

Regulatory Update Published in the January 2005 Employee Benefit Plan Review (PDF)
4 pages. Includes articles titled: Phased Retirement Proposed Regulations, New Retirement Plan Limits for 2005, and Proposed 403(b) Regulations. (Gardner Carton & Douglas)

State Pension Systems' Funding Ratios Improve in 2004
Excerpt: "Reversing the dour findings of 2003, a Wilshire Research study reports that the funding ratio for the most recently reporting state retirement systems is up 6% over last year's figure." (PLANSPONSOR.com; one-time registration required)

Text: PBGC Proposed Rule on Valuation of Benefits; Mortality Assumptions (PDF)
7 pages. Excerpt: "The Pension Benefit Guaranty Corporation proposes to amend its benefit valuation regulation by adopting more current mortality assumptions (moving from a version of GAM–83 to a version of GAM–94). The updated mortality assumptions will better conform to those used by private-sector insurers in pricing group annuities." (Pension Benefit Guaranty Corporation via Federal Register)

PBGC Invites Mortality Assumption Rule Comment
Excerpt: "The nation's insurer of private-sector pension plans said Monday that it is looking for public comment on a proposed rule to amend the mortality assumption in its valuation regulation." (PLANSPONSOR.com; one-time registration required)

ABC Testimony on Phased Retirement before Treasury Department and IRS on March 14, 2005 (PDF)
6 pages. Excerpt: "As a matter of public policy, there are good reasons to encourage phased retirement. Many people leave their employer for another employer creating inefficiencies in terms of recruiting and training costs for both the old and the new company. In addition, encouraging older individuals to remain in the workforce through phased retirement programs broadens the tax base and reduces the burden on government programs such as Social Security." (American Benefits Council)

Attitudes of Individuals Aged 50 and Older Toward Phased Retirement (PDF)
30 pages. Excerpt: "Findings reveal that nearly two in five age 50+ workers would be interested in participating in the type of phased retirement plan presented in the survey. Of workers who expressed interest in phased retirement, nearly four in five expect that the availability of such a plan would encourage them to work past their expected retirement age. [R]espondents ... are wary of the possibility that phased retirement might reduce their final pension benefit." (AARP)

American Benefits Council Urges Changes in Phased Retirement
Excerpt: "Proposed regulations that would allow employees moving to reduced work schedules to receive a portion of their earned pension benefits should be modified, a benefits trade group testified Monday." (Business Insurance)

Overview: New Trust Rules for Pension Plans in Puerto Rico (PDF)
2 pages. Excerpt: "Employers with operations in Puerto Rico will have to comply with a recently enacted law that requires retirement plans qualified under the laws of Puerto Rico to hold plan assets in a Puerto Rico trust and have a resident trustee. However, an affected U.S. plan may receive a waiver from this requirement if it appoints as its payment agent a financial institution regulated by Puerto Rico law." (Mellon Financial Corporation)

Opinion: Fixing Social Security with Minor Changes and Universal Pension Accounts
Excerpt: "Second, enable every worker to save and own capital assets. The Progressive Policy Institute has proposed Universal Pension Accounts that would give workers a tax break if they start saving from their first job on. For workers with modest wages, the federal government should also make matching contributions to their accounts, thus boosting the nation's anemic personal savings rate and building capital for investment." (Blueprint Magazine via Progressive Policy Institute)

Watson Wyatt Insider March 2005 Special Edition on Social Security Reform (PDF)
60 pages. Excerpt: "Social Security reform will affect us all -- whether as employers, workers or retirees. There's considerable agreement that reforms are ahead, but, so far, little consensus on what those reforms will be. Some claim we're facing a crisis and must act now, while others counter that it is merely an easily remedied imbalance that can wait for another time (or term). Advocates of personal accounts contend that this reform can shore up our ailing retirement system ...." (Watson Wyatt Worldwide)

Opinion: The Burden of Social Security Taxes and the Burden of Wage Inequality (PDF)
5 pages. Excerpt: "Even the wage loss due to the growth in inequality just in 2004 is large relative to the size of the projected Social Security shortfall. The impact of growing inequality in this single year on the wage of the typical worker was 80 percent as large as the prospective tax increase that the trustees project will needed to restore solvency. This single year wage loss was 50 percent larger than the tax increase that CBO projects will be needed to restore solvency." (Center for Economic and Policy Research)

Employer Based Retirement Plan Community Urges Enactment of EGTRRA Permanency (PDF)
2 pages. Excerpt: "The undersigned organizations, representing the broad spectrum of employer plan sponsors and retirement plan service providers, commend President Bush for including the permanency of the pension provisions found in Title Six of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) in the Administration's 2006 Budget. Many critical retirement savings provisions in EGTRRA will expire at theend of 2010 or earlier unless they are made permanent." (The ERISA Committee)

Survey on the Prevalence of Traditional and Hybrid Defined Benefit Pension Plans
26 pages. Excerpt: "The purpose of the survey was to examine the prevalence of traditional and hybrid defined benefit pension plans in large organizations that have operations in the United States. The results of the study may prove useful to pension practitioners and policy makers wishing to gauge the effect of a recent US court ruling with potentially widespread implications for pension plans commonly referred to as cash balance plans." (Society of Actuaries / Mathew Greenwald & Associates, Inc.)

Links to Items on Executive Comp, Benefits in General

Accounting Rule Will Hit Stock Plans: Companies Will Have to Treat Stock-Based Programs As Expense
Excerpt: "First it was stock options. Now a more-pedestrian perk, employee stock-purchase plans, could take a hit as companies get ready for a new accounting rule." (The Wall Street Journal via The Morning Call)

Regulatory Update Published in the December 2004 Employee Benefit Plan Review (PDF)
3 pages. Includes articles titled: New Rules for Nonqualified Deferred Compensation Arrangements and FASB Delays Effective Date of Stock Option Expensing Rules (Gardner Carton & Douglas)

Overview: Nonqualified Deferred Compensation Plan Guidance (PDF)
14 pages. Excerpt: "The next round of guidance is expected to be issued in the first part of 2005, and will need to address distribution procedures and requirements, funding rules, guidance regarding the consequences of document failures, severance programs beyond 2005, and other critical transition rules. (Published January 14, 2005)" (Haynes and Boone, LLP)

Overview: New USERRA Notice of Employee Rights and Benefits
Excerpt: "U.S. Secretary of Labor, Elaine L. Chao announced on March 10, 2005 that the notice explaining the rights of employees under the Uniformed Services Employment and Reemployment Rights Act (USERRA) is now available for employers to download from the DOL Web site." (SunGard Corbel)

Overview: DOL Issues USERRA Notice – Requirement in Effect for Employers (PDF)
1 page. Excerpt: "[E]mployers must provide a notice of employees' rights under USERRA, including the right of employees and their dependents to continue employer-provided health coverage for up to 24 months while on active military duty. .... The DOL has now issued an interim final rule containing model text for this notice and has provided a notice suitable for posting. The notice requirement is now in effect." (Mellon Financial Corporation)

Newly Posted Press Releases

McKay Hochman Releases 2005 Education Programs Course Catalog
(McKay Hochman Co., Inc.)

PBGC Is Seeking Comment On A Proposed Rule To Amend The Mortality Assumption In Its Valuation Regulation
(Pension Benefit Guaranty Corporation (PBGC))

Council Urges Flexibility In Final Phased Retirement Regulations Issued By Treasury and IRS
(American Benefits Council)

ACLI Urges Congress To Extend Retirement Savings Provisions In EGTRRA
(American Council of Life Insurers)

Health Care Quality Bridges Political Divide- Clinton, Gingrich Accept 2005 Health Quality Awards
(National Committee for Quality Assurance (NCQA))

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Senior Plan Administrator
for American National Insurance Company
in TX

Retirement Plan Administrator
for Independent Retirement Plan Administration Company
in FL

Client Account Manager
for New York Life Investment Management LLC
in MA

Pension Administrator
for Lurie Besikof Lapidus and Company, LLP
in MN

401(k)/DC Plan Administrator
for Central New Jersey Wealth Management Firm
in NJ

Sr. Advisor Retiree Health Care
for Kentucky Retirement Systems
in KY

Junior Pension Administrator
for Primark Benefits
in CA

Employee Benefits Associate
for THE ESQUIRE GROUP
in MN

Pension Sales Consultant
for Polycomp Administrative Services, Inc.
in CA

Vice President - Manager of Compensation and Benefits
for Midwest Regional Bank
in NE

Software Quality Assurance Analyst
for ExpertPlan Inc.
in NJ



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