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March 31, 2005
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Immerse Yourself in ERISA Title 1 Issues April 25 - 26, 2005 * Washington, DC Get the latest regulatory and legislative updates on ERISA at "The DOL Speaks 2005 Employee Benefits Conference." Every session will feature both public and private sector speakers presenting their unique perspective on Title 1 issues. Featured Speaker: U.S. Secretary of Labor Elaine L. Chao
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Exemption Sought for Employers Offering Automatic 401(k) Plans
Excerpt: "[A] new nonpartisan group of business leaders, academics and former government officials has introduced a concept that it believes is a nonpolitical solution to encouraging retirement savings among employers. The Retirement Security Project is calling on Congress to pass legislation that would provide employers with safe harbor provisions exempting them from fiduciary liability and nondiscrimination rules if they offer automatic 401(k) plans." (Workforce Management; one-time registration required)
Excessive 401(k) Costs Will Trigger a Litigation Tsunami for Plan Sponsors
Excerpt: "Business as usual for plan sponsors is likely to lead to trouble when it comes to 401(k) costs. Unbeknownst to most plan sponsors, they have few defenses if they fail to investigate and prudently minimize costs charged to plan participants. Based on the inattention paid by most plan sponsors to this area, a litigation wave is likely." (Fulcum Financial)
Fitting Exchange Traded Funds Into 401(k) Plans Is a Challenge
Excerpt: "So far, ETFs have made an appearance in just a few 401(k) platforms, though according to people in the industry, there is a groundswell of interest to make them much more widely available. Until now, ETFs have been present in plans with so-called brokerage windows, through which participants paying a brokerage commission can buy and sell investments not included in the plan." (Investment News)
Some Providers Try to Put Kibosh on Roth 401(k)
Excerpt: "While defined contribution plan providers gear up to offer the Roth 401(k) next year, some companies are quietly trying to kill the option before it becomes available. Brian Graff, executive director and chief executive of the American Society of Pension Professionals and Actuaries in Arlington, Va., said that a few 'larger institutions' are urging Congress to repeal the Roth 401(k) before it goes into effect Jan. 1." (Investment News)
Hong Kong: Major Amendments Affecting Accounting of Retirement Benefits
Excerpt: "Hong Kong Accounting Standard 19 – Employee Benefits (HKAS 19), formerly known as SSAP 34, has recently adopted a number of changes made to the International Accounting Standard 19. This Bulletin summarizes these changes." (Watson Wyatt Worldwide)
Overview: 2006 Budget Details on Pension Funding Reform
Excerpt: "On January 10, 2005, the Bush administration released a proposal to overhaul the funding rules for single-employer defined benefit plans, establish new disclosure requirements for plan sponsors and raise PBGC premiums (Watson Wyatt Insider, February 2005). President Bush's budget proposal for the 2006 fiscal year, which was released on February 7, 2005, provided more details about the proposal." (Watson Wyatt Worldwide)
Opinion on Administration's Defined Benefit Pension Plan Funding Proposals
Excerpt: "In the recently released budget proposals, the Bush administration outlines pension funding reforms whose stated goals are twofold: to protect workers' benefits and to avert a taxpayer bailout of the financially beleaguered Pension Benefit Guaranty Corporation (PBGC). While the proposal includes some sensible elements, it lacks an overarching framework that acknowledges two realities of the private pension system." (Watson Wyatt Worldwide)
Going Against the Grain, West Virginia House of Delegates Votes to End Personal Retirement Accounts
Excerpt: "President Bush and California Gov. Arnold Schwarzenegger may consider them the bee's knees, but the House of Delegates voted Wednesday to shut down West Virginia's only retirement plan based on personal investment accounts." (The Herald-Dispatch)
Oregon Supreme Court's Decision Overturning Two Pension Reform Provisions Will Cost $2.1 Billion
Excerpt: "The recent Oregon Supreme Court's decision to overturn two key provisions of the Oregon Legislature's 2003 pension-reform package will cost $2.1 billion, .... Public Employees Retirement System (PERS) actuaries ... released the estimated price tag for the court's ruling Tuesday at the monthly PERS Board meeting, .... PERS has to shoulder the additional expense over the next 25 years and eventually charge it back out to workers and retirees, the actuaries said." (PLANSPONSOR.com; one-time registration required)
Overview: 2006 Budget Proposal Also Addresses Hybrid Pension Plans and Other Issues
Excerpt: "In addition to proposing reforms to the defined benefit funding rules ..., President Bush's budget proposal for the 2006 fiscal year would change the rules governing hybrid pension plans, health care plans and retirement savings plans." (Watson Wyatt Worldwide)
Opinion: Eschew the Proposed Private Accounts and Instead Make Better Use of What Exists Now: IRAs
Excerpt: "My bottom line is simple: let's use the existing IRA accounts as repositories for any diverted FICA monies. The populace will make all the decisions, and that's how it should be. If people want to buy Microsoft, Procter & Gamble, or Shuffle Master, give them the freedom to do so. Yes, there is the danger that some folks will make bad decisions. But those who don't understand stocks and don't care to research them can simply do what they probably are already doing in their IRAs -- ...." (The Motley Fool)
Social Security Update: Greenspan Suggests Higher Retirement Age, Lower Benefits
Excerpt: "Federal Reserve Board chairman Alan Greenspan told the Senate Select Committee on Aging that Congress should consider raising the Social Security retirement age because 'Americans are not only living longer, but are also generally living healthier.' It is logical to have older people work longer, he noted, and 'extending labor force participation by just a few years could have a sizable impact' on economic output." (Spencer Benefits Reports)
Compensation and Working Conditions Online Article: 'Defined Benefit Plans at the Dawn of ERISA'
Excerpt: "More than 30 years after the Employee Retirement Income Security Act (ERISA) was signed into law, defined benefit plans are under more scrutiny than ever. This article summarizes a 1974 BLS analysis of major provisions of a sample of defined benefit plans in private industry as they existed just prior to enactment of ERISA; where possible, it also cites recent data from the National Compensation Survey for comparison." (U.S. Bureau of Labor Statistics)
Social Security, Economic Growth and Stock Returns
Excerpt: "In barnstorming the country over Social Security, administration officials predict that American economic growth will slow to an anemic rate of 1.9 percent as baby boomers reach retirement. Yet as they extol the rewards of letting people invest some of their payroll taxes in personal retirement accounts, President Bush and his allies assume that stock returns will be almost as high as ever, about 6.5 percent a year after inflation." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Summary: FASB Issues FIN 47 on Accounting for Conditional Asset Retirement Obligations
Excerpt: "The Financial Accounting Standards Board (FASB) issued today, FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47). Per FASB's press release, FIN 47 will result in (a) more consistent recognition of liabilities relating to asset retirement obligations, (b) more information about expected future cash outflows associated with those obligations, and (c) more information about investments in long-lived assets because additional asset retirement ...." (Financial Executives International)
Commentary: Supreme Court Issues Important ADEA Opinion in Smith v. City of Jackson
Excerpt: "From SCOTUSblog this morning: The Supreme Court, in a major legal victory for older workers, ruled 5-3 Wednesday that employees need not show intentional discrimination against them based on age in order to win a case under federal law. They can prevail on a theory that an employer's job practice had a more negative impact on older than younger workers." (Attorney B. Janell Grenier via BenefitsBlog.com)
Supreme Court Removes Hurdle to Suits Alleging Age Bias in Employment
Excerpt: "Workers who sue their employers for age discrimination need not prove that the discrimination was intentional, the Supreme Court ruled on Wednesday. Adopting a pro-worker interpretation of the federal law that prohibits age discrimination in employment, the 5-to-3 decision held that employees can prevail by showing that a policy has a discriminatory impact on older workers, regardless of the employer's motivation." (The New York Times; one-time registration required)
Executive Compensation: Are You In Compliance? Congress and the SEC Are Watching... (PDF)
3 pages. Excerpt: "Regulation of executive compensation disclosure and deferrals is, like it or not, on the increase and getting more complicated. In-house counsel ought to review their disclosure and deferral practices to determine what needs revision. The failure to do so could result in embarrassing adverse publicity, and executive discontent, and could be expensive, in time and money expended dealing with government investigators, shareholder constituency groups and the IRS." (LAW JOURNAL NEWSLETTERS - CORPORATE COUNSELOR via Dechert LLP)
Hewitt Federal Legislation Quick Guide Updated as of March 29, 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
Employee Benefits in Mergers and Acquisitions: Key to a Successful Corporate Transaction
Nationwide on April 28, 2005
presented by Thompson Interactive, A Division of Thompson Publishing Group
Financial Illiteracy in the Workplace: The Risks, Resolution, and Rewards
Nationwide on April 13, 2005
presented by The EDSA Group, Inc.
Newly Posted Press Releases
Employee Education and Intranets Play Central Role in Shift to Consumer-Directed Health Care
(Watson Wyatt)
Still River Releases New Retirement Income Planning Software
(Still River Retirement Planning Software, Inc.)
Public-Sector Workers Have Longer Median Job Tenure
(Employee Benefit Research Institute (EBRI))
National Poll Shows Public Opinion Sharply Divided on Regulating Appearance - From Weight to Tattoos - In the Workplace
(Employment Law Alliance)
Instant HR Answers-TM- Debuts - BLR's New Human Resource Answer Site Uses 'Revolutionary' Search Technology
(Business and Legal Reports, Inc.)
District Court Ruling Will Accelerate Employer Retreat From Retiree Health Plans
(ERIC (ERISA Industry Committee))
Council supports EEOC’s appeal of court order on retiree health benefits rule
(American Benefits Council)
METRICS PARTNERS ANNOUNCES RETIREMENT PROFESSIONALS BUYERS GUIDE
(Metrics Partners)
New report assesses how employers use the Internet to raise employee Health I-CUE™
(Health2 Resources)
Newly Posted or Renewed Job Openings
Computer Operations Analyst
for Wells Fargo
in MN
ERISA Pension Attorney
for The Waage Law Firm
in CA
Administrative Assistant
for The Waage Law Firm
in CA
Flex/Cafeteria Plan Benefit Administration
for Rapidly Growing TPA
in CA
Sr. Trust Accountant
for Sempra Energy
in CA
Health & Welfare Specialist
for Long Island Employee Benefits Group Ltd.
in NY
Compliance Officer
for PennRock Financial Advisors, N.A.
in PA
Account Executive
for Transamerica
in IL, MA
Account Manager, Retirement Plans
for Charles W. Cammack, Associates, Inc.
in NJ, NY
Account Manager, Health & Welfare
for Charles W. Cammack Associates, Inc.
in NJ, NY
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