| BenefitsLink Retirement Plans Newsletter |   |
April 4, 2005
Today's sponsor: Actuarial Systems Corporation
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ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS ASC provides complete automation for the pension office, including: DC/401(k) and DB administration and valuation systems, sophisticated Compliance Testing, DV Direct Daily Valuation, Advanced Information Manager Database (AIM), and Single-Step Processing. All ASC Technical Support Members were experienced Pension Administrators or Actuaries before joining ASC-- and most have been with ASC for over 10 years.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Supreme Court Rules IRAs Can Be Shielded from Creditors
Excerpt: "The Supreme Court on Monday ruled that creditors may not seize Individual Retirement Accounts when people file for bankrup.tcy, giving protection to a nest egg relied upon by millions of Americans. The unanimous decision sides with a bankrupt Arkansas couple fighting to keep more than $55,000 in retirement savings. As a result, IRAs now join pensions, 401(k)s, Social Security and other benefits tied to age, illness or disability that are afforded protection under bankrup.tcy law." (AP via Star Telegram.com; one-time registration required)
Working to Retire -- With Pension Plans that Place More Burden on Employees, Such As 401(k) Plans
Excerpt: "In response to the ballooning traditional pension plan costs, many employers have converted to cash-balance plans, which are defined benefit plans that base the payout on an employee's salary. Many companies also offer a 401(k), a defined contribution plan, or some combination of plans to help employees prepare for their golden years.' (The Roanoke Times)
Lifecyle Funds Can Help Companies Mitigate Risk and Boost Employee Savings
Excerpt: "The funds, which rebalance based on the investor's retirement age, are gaining popularity. But getting workers to use them correctly has its own set of problems." (Workforce Management; one-time registration required)
Some Economists See Need for Automatic 401(k) Plans to Provide a Secure Future for Retirees
Excerpt: "Bush and some Republicans in Congress say Social Security investment accounts will increase savings. But others counter that retirement income can be boosted without altering Social Security. One such proposal on the table is making enrollment in workplace 401(k) plans automatic." (Hearst News Service via Houston Chronicle)
Future 401(k) Plans May Be Set on 'Default' for Employee on Every Step from Enrollment to Rollover
Excerpt: "Companies like the way autopilot 401(k) measures help their lower-income employees boost savings for retirement. But there's a nice kick for high-income employees, too. Under government 'nondiscrimination standards,' a formula allows companies that increase overall 401(k) participation to proportionally boost the tax-deferred pension contributions of executives and other highly compensated employees even more." (CFO Magazine)
Directory of 401(k) Resources: Tools and Resources that Can Help Shape Your 401(k) Decisions
Excerpt: "This directory is a compilation of links to resources outside the control of CFO.com, which has no control over their content or availability. Links to outside resources will open in a new browser window; to return to CFO.com, simply close that window. Because of the great extent of the information we've gathered for the 401(k) providers themselves, links to those companies' Web sites are included in a separate table." (CFO.com)
Secretary Snow Says Treasury Still Thinking about the 30-Year Bond
Excerpt: "While US Treasury Department officials are comfortable with their decision four years ago to no longer issue the 30-year bond, they continue to keep the issue on their radar screens through periodic reviews. That was the statement made in a Bismark, North Dakota speech this week by Treasury Secretary John Snow, according to a Dow Jones news report. The issue is of interest to the retirement services community because the 30-year-bond has often been used for pension plan calculations." (PLANSPONSOR.com; one-time registration required)
Overview: PBGC Releases Final 4010 Regulations
Excerpt: "In March, the Pension Benefit Guaranty Corporation (PBGC) released final revised 4010 regulations. The new rules affect plan sponsors that are subject to the reporting requirements of ERISA section 4010, which include many of the nation's largest plan sponsors and their subsidiaries. Section 4010 requires annual reporting whenever a controlled group's total unfunded vested benefits exceed $50 million." (Watson Wyatt Worldwide)
Overview: IRS Proposes Revisions to Relative Value Disclosure Regulations
Excerpt: "The IRS has issued proposed regulations to revise the final relative value disclosure regulations. The revisions clarify the content of the required disclosures, as well as the conditions that must be satisfied for a section 417(e) payment to qualify for the delayed effective date of February 1, 2006, for certain optional forms of payment." (Watson Wyatt Worldwide)
Overview: Annual Funding Notice for Multiemployer Defined Benefit Plans
Excerpt: "The notice is similar in form, style and content to the ERISA section 4011 notice furnished to participants in certain underfunded, single-employer defined benefit plans. However, the multiemployer plan funding notice must be provided to participants annually, regardless of the multiemployer plan's funded status." (Watson Wyatt Worldwide)
NBA Retirees Looking for Pension Increase
Excerpt: "Retired NBA players are hoping that Commissioner David Stern and union Executive Director Billy Hunter up their monthly pensions out of good-will. .... A union for retired players, which has 600 to 800 members, currently gets its players $356 a month for every year played in the league. They want another $216 per month, according to Bloomberg News." (PLANSPONSOR.com; one-time registration required)
Financial Executives International Launches Online ERISA Fiduciary Governance Training Course
Excerpt: "Financial Executives International announced the availability of a new Internet-based ERISA fiduciary governance training course designed exclusively for retirement plan fiduciaries and plan service providers." (Financial Executives International)
National Center for Policy Analysis Analyst Proposes Personal Employment Accounts
Excerpt: "[T]he National Center for Policy Analysis ... wants to apply the personal account concept to a new social problem. [unemployment] .... The government would organize the program by putting a portion of payroll taxes in investment accounts that workers would own and control .... [A]ny money remaining in their accounts when they retire [would be added] to their retirement assets ...." (National Underwriter)
Repeal of State and Local Government Employer Pick Ups Included in Congressional Proposals (PDF)
4 pages. Excerpt: "The staff members of the Joint Committee on Taxation (JCT) have presented options for changing the tax treatment of pensions and other provisions of the Internal Revenue Code. The JCT staff member's publication, Options to Improve Tax Compliance and Reform Tax Expenditures, JCS-02-05 (2005), contains five options that directly affect state and local government (SLG) retirement and other benefit plans." (National Council on Teacher Retirement (NCTR))
Overview: Excess IRA Contributions -- Part Two -- Consequences and Corrections
Excerpt: "Internal Revenue Code (IRC) Section 4973 imposes a 6 percent penalty tax on certain excess contributions to a traditional individual retirement account (IRA) or a Roth IRA. Part one of this article discussed how an IRA owner creates an excess IRA contribution and how he/she pays the penalty tax. This part examines the various methods available for correcting excess contributions and the accompanying responsibilities of an IRA owner and his/her IRA custodian/trustee." (Bankers Systems, Inc.)
Overview: ERISA and Participants with 3 Years of Service -- Amendment that Would Eliminate Vesting
Excerpt: "Under the rule established in this case, a plan should not make an amendment that reduces any vesting provision without implementing ERISA Section 203(c)(1)(B) rights for participants with at least three years of service." (Employee Benefits Institute of America Inc.)
Summary: Workers' Retirement Plan Preferences and Expectations from the Retirement Attitude Survey
Excerpt: "The Watson Wyatt Retirement Attitude Survey was completed by roughly 8,000 employees from a national panel in summer 2003. Every employee in the sample was matched to his or her actual plan design information using the Watson Wyatt COMPARISON™ database. All respondents are covered by a defined benefit plan or a defined contribution plan or both." (Watson Wyatt Worldwide)
GOP Senator Graham Fills Social Security Void with a Plan Bound to Irk All Sides
Excerpt: "Sen. Lindsey O. Graham makes no apology for elbowing his way to the front of the Social Security debate, arguing for significant tax increases and benefit cuts to salvage a program whose long-term solvency, he says, requires nothing less." (The Washington Post; one-time registration required)
Links to Items on Executive Comp, Benefits in General
FEI Summary: Proposed FASB Staff Position EITF 00-19-a
Excerpt: "The scope of the proposed FSP is 'intended to apply to those instruments issued in share-based payment transactions with employees accounted for under Statement 123(R), FASB Statement No. 123, Accounting for Stock-Based Compensation, or APB Opinion No. 25, Accounting for Stock Issued to Employees, and to instruments issued in a business combination in exchange for share-based payment awards of the acquired business that are held by employees of that business.'" (Financial Executives International)
Opinion: Are Employers Ready for the New Old Workforce?
Excerpt: "If Americans must work longer than planned, employers need to deal with GOMP (grumpy old man phenomenon), and, you guessed it - GOWP. How can we engage older workers so that they don't become a productivity issue? By addressing their special needs.' (Employee Benefit News)
Aging to Take Toll on State Workforces
Excerpt: "More than 25 states will experience huge employee turnover in the next decade and beyond as aging public servants retire, a recent report found. The hardest hit will be the state of Washington, but Maine, Tennessee, Michigan and Pennsylvania are right behind." (Stateline.org)
Overview: IRS Issues Guidance on Deduction for Repatriated Foreign Earnings
Excerpt: "The American Jobs Creation Act ... created a temporary tax benefit for companies that repatriate earnings of foreign subsidiaries and use the funds for specified purposes. Specifically, employers may take a one-time 85 percent deduction for eligible dividends from foreign subsidiaries, as long as they use the dividends for specified domestic investments. The new guidance ... defines approved uses for the repatriated earnings, which include contributions to a qualified retirement plan." (Watson Wyatt Worldwide)
5th Circuit Appeals Court: Only 'Substantial' ERISA Compliance Needed
Excerpt: "A federal appeals court has ruled that only 'substantial' compliance with the Employee Retirement Income Security Act (ERISA) is needed in order to comply with the federal retirement plan law. With the ruling, the US 5th Circuit Court of Appeals agreed with seven other federal courts regarding the quality of a benefit denial notice given by UNUM Life Insurance Co. to a long-term disability participant. Although the notice was 'less than perfect,' according to the court, it was ...." (PLANSPONSOR.com; one-time registration required)
G.ay Couples File Suit After Michigan Denies Domestic Partner Benefits
Excerpt: "Michigan is not the only state in which a battle over the rights of same-sex partners is under way. But it has become the focus of attention with the filing of a lawsuit by the American Civil Liberties Union in which 21 same-sex couples are asking the state courts to clarify whether the amendment's passage means the loss of their benefits." (The New York Times; one-time registration required)
Overview: 457(f) Plans Need Review, or Participants May Pay High Price
Excerpt: "Recently passed legislation requires amendments to many 457(f) plans by December 31, 2005. Meanwhile, the plans must be operated in good faith compliance with the new rules, or participants will owe income taxes on their 457(f) plan benefits, plus 20% penalties, plus interest." (Faegre & Benson LLP)
The New Executive Bonanza: Retirement
Excerpt: "Everyone knows that chief executives are paid huge amounts of money while they are working. Less known is just how much they make in retirement. At many of America's biggest corporations, it is not uncommon for retired executives who were paid tens or even hundreds of millions of dollars during their tenures to receive $1 million or more in pension benefits every year - for as long as they live." (The New York Times; one-time registration required)
An Early Advocate of Stock Options Debunks Himself
Excerpt: "Fifteen years ago, Michael C. Jensen, a professor at the Harvard Business School, wrote a paper with Kevin J. Murphy, then a professor at the University of Rochester, that trumpeted some pretty radical ideas for the time. .... Their suggestion was to make stock options a big component of top management's pay, ensuring that they do well only if shareholders do well." (The New York Times; one-time registration required)
This Year's Proxy Statements More Forthcoming on Executive Perquisites, but No Reduction Shown
Excerpt: "The amounts of money spent on executive perks - as tallied in the catch-all category labeled 'other compensation' - vary widely, and they rise and fall inexplicably. Most often, the cash goes to sweeten corporate officers' health care benefits and retirement accounts. But there are other popular perks that stretch beyond the office, like the annual bill for the chief executive's membership in some exclusive club." (The New York Times; one-time registration required)
Benefits Availability Drops, Satisfaction Rises, As Employees Worry About Financial Security
Excerpt: "From the first quarter of 2004 to the first quarter of 2005, the availability of defined contribution plans, life insurance, disability insurance, tuition reimbursement, and flextime has declined significantly among small and midsize firms, according to the Principal Financial. At the same time, employee satisfaction levels have increased for profit-sharing/bonus plans, defined benefit plans, defined contribution plans, life insurance, and health insurance." (Spencer Benefits Reports)
Information Resources on Incentive Stock Options and AMT
Excerpt: "Hunting for information about taxation issues pertaining to incentive stock options, such as AMT? Try Michael Gray's Incentive Stock Option Frequently Asked Questions. You can also access archives for his newsletter ... which he describes as '[a]n irregular newsletter for employees with tax issues relating to employee stock options.' [Access to other relevant Web sites and articles is also given on target page.]" (Attorney B. Janell Grenier via BenefitsBlog.com)
Newly Posted Events
Advanced Distribution Issues and Loans
Nationwide on June 2, 2005
presented by BISYS Retirement Services
Annual Legal and Regulatory Update
in Ohio on April 21, 2005
presented by WEB (Worldwide Employee Benefits Network) Cleveland Chapter
Individual(k) Plans
Nationwide on May 19, 2005
presented by BISYS Retirement Services
Introduction to 401(k) Plans
Nationwide on May 5, 2005
presented by BISYS Retirement Services
Introduction to Deferral Programs for Governmental and Tax-Exempt Employers
Nationwide on June 9, 2005
presented by BISYS Retirement Services
Introduction to Qualified Plans
Nationwide on May 3, 2005
presented by BISYS Retirement Services
Introduction to Qualified Retirement Plan Distributions
Nationwide on May 18, 2005
presented by BISYS Retirement Services
NEW Qualified Plan Seminars in North Carolina
in North Carolina on May 13, 2005
presented by ASC
Plan Design Trends I - Safe Harbor 401(k)
Nationwide on May 25, 2005
presented by BISYS Retirement Services
Plan Design Trends II - New Comparability and Age-Weighted Plans
Nationwide on June 1, 2005
presented by BISYS Retirement Services
Your Love/Hate Relationship with the Final 401(k) Regulations Webcast
Nationwide on April 27, 2005
presented by ASPPA (American Society of Pension Professionals & Actuaries)
Newly Posted Press Releases
PBGC To Protect Pensions At Liam Ventures
(Pension Benefit Guaranty Corporation (PBGC))
U.S. Labor Secretary Elaine L. Chao Visits Pittsburgh to Highlight President’s Plan for Retirement Security
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)
Newly Posted or Renewed Job Openings
401(k) Senior Plan Administrator – Analyst
for J. D. Benefits, Inc.
in NC
Retirement Plan Consultant
for Ceridian
in WI
Communication Consultant
for Fidelity Investments
in MA
Technical Writer
for Fidelity Investments
in MA
Relationship Manager (Retirement Plans)
for Mutual of Omaha Insurance Co.
in ANY STATE
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Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.
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