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April 5, 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
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Supreme Court Ruling Bars Creditors from Individual Retirement Account Assets
Excerpt: "A unanimous Supreme Court on Monday ruled that federal bankrup.tcy law shields individual retirement accounts from creditors. The decision gives middle-income consumers, for whom an I.R.A. is often the most significant retirement asset, the same protection in bankrup.tcy that higher-paid workers receive for their 401(k) plans and company pensions." (The New York Times; one-time registration required)
Commentary and Background on the Supreme Court IRA/Bankrup.tcy Decision
Target page provides links to the opinion and background and history of the case, plus recent news articles. (Attorney B. Janell Grenier via BenefitsBlog.com)
Text of Supreme Court IRA Bankrup.tcy Case: Rousey v. Jacoway (PDF)
17 pages. (Supreme Court of the United States of America)
PSCA's Automatic Enrollment Safe Harbor Legislative Proposal (PDF)
7 pages. The 2 page DESCRIPTION OF AUTOMATIC ENROLLMENT SAFE HARBOR LEGISLATIVE PROPOSAL is at http://www.psca.org/WASH/PDF/3-21-05autoenrollsummary.pdf. (The Profit Sharing/401(k) Council of America)
Option to Offer Roth 401(k) Accounts Available to Employers Beginning in 2006
Excerpt: "Beginning in 2006, plan sponsors may allow employees to make Roth contributions to their 401(k) plans. Roth contributions are made on an after-tax basis, and qualified distributions of Roth contributions and associated earnings are tax-free, similar to Roth IRAs. A 403(b) plan may also permit Roth contributions, beginning in 2006. In order for a 401(k) plan to permit designated Roth contributions, it must establish a program under which employees may elect to make designated Roth ...." (Hewitt Associates)
New Laws Aim to Plug `Leakage' in 401(k)s
Excerpt: "One of the key problems that continue to beset 401(k) and related retirement savings plans is what experts call 'leakage.' By that they mean the tendency of account holders, especially younger ones, to withdraw their money when they change jobs and spend it. It hasn't helped that many companies are eager to get rid of accounts with small balances and are all too ready to cut checks for departing workers and close them out." (The Washington Post via Sun-Sentinel)
Are 401(k)s Headed for a Fiduciary Meltdown?
Excerpt: "Employee-benefit-plan sponsors, especially those in the 401(k) area, have had some problems in fulfilling their fiduciary responsibility, given all the regulatory attention of the past two years. Leading authorities characterize the problems according to their particular area of expertise, so it is difficult to get a consensus on what the solution might be." (Investment News; registration or subscription required)
Cash or Deferred Arrangement Listing of Required Modifications and Information Package from the IRS (PDF)
38 pages. Excerpt: "(For use with master or prototype (M&P) plans intending to satisfy the requirements of Code §§ 401(k) and 401(m).) This information package contains samples of plan provisions that satisfy certain specific requirements of the Internal Revenue Code, as amended through the Job Creation and Worker Assistance Act of 2002 (P.L. 107-147)." (U.S. Internal Revenue Service)
Defined Contribution Listing of Required Modifications and Information Package from the IRS (PDF)
107 pages. Excerpt: "To Sponsors of Master or Prototype Plans: This information package contains samples of plan provisions that have been found to satisfy certain specific requirements of the Internal Revenue Code as amended through the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107-16 (EGTRRA) with technical corrections made by the Job Creation and Worker Assistance Act of 2002, Pub. L. 107-147 (JCWAA)." (U.S. Internal Revenue Service)
Understanding & Managing Fiduciary Responsibility: A Guide for Plan Sponsors (PDF)
28 pages. Excerpt: "This guide was developed for plan sponsors of defined benefit and defined contribution plans, including employer-sponsored 403(b) plans that are subject to ERISA's rules. However, it focuses primarily on participant-directed plans, such as 401(k) and 403(b) plans, except where noted." (Principal Financial Services, Inc.)
Labor Department to Propose Tighter 401(k) Deposit Rules
Excerpt: "The Labor Department has been taking a long look at the time it takes employers to deposit employee 401(k) contributions. By summer, officials say, the department plans to propose a rule reducing the time companies have to make such deposits. .... Currently, an employer has up to seven weeks to deposit 401(k) payroll deductions into the plan. Before 1997, employers had 90 days." (Employee Benefit News)
An Analysis of Fiduciary Rules Applicable to 403(b) Plans, The Sponsors and Their Officers (PDF)
10 pages. Excerpt: "While it is commonly understood that all 403(b) plans are subject to the requirements of the Internal Revenue Code ('Code'), there is a misconception that private sector (i.e., non-government) 403(b) plans are exempt from ERISA. The purpose of this White Paper is to explain that private sector 403(b) plan sponsors and fiduciaries are subject to ERISA's fiduciary rules and to describe some of the most important legal duties of those fiduciaries." (Principal Financial Services, Inc.)
The Pension Forum: Valuation of Pension Obligations with Lump Sums (PDF)
Pages 49-61 of 62 pages. Excerpt: "This paper will discuss the valuation of lump sums for both funding and FAS 87 valuations, particularly the selection of appropriate discount rates." (Society of Actuaries)
The Pension Forum: Understanding the Corporate Bond Yield Curve (PDF)
Pages 2-38 of 62 pages. Excerpt: "This paper discusses the construction of the corporate bond yield curve and possible applications to pension valuation. The first part addresses the mathematical theory and tools needed to extract the yield curve from corporate bond data and the issues that arise in contrast to the Treasury yield curve. ....... In the last part questions arising when applying the yield curve to pension valuation are discussed." (Society of Actuaries)
U.K.'s Pension Protection Fund and the New Pensions Regulator Will Begin Operations April 6, 2005
Excerpt: "The Pension Protection Fund, loosely modeled on the U.S. Pension Benefit Guaranty Corp., has been set up to safeguard the pensions of defined benefit plan members whose sponsoring employers go bankrupt and leave their pension plans underfunded. ....... One of the objectives of the Pensions Regulator is to try to prevent situations that cause claims for compensation from the Pension Protection Fund from arising, it said in a statement." (Business Insurance)
Overview: Social Security Trustees' 2005 Annual Report
Excerpt: "The conclusion is that, though highly challenging, the financial difficulties facing Social Security and Medicare are not insurmountable. But action must be taken to address them in a timely manner." (Cypen & Cypen)
Congress Needs to Clarify and Codify Treatment of Tribal Government Sponsored Retirement Plans (PDF)
2 pages. Excerpt: "[W]e note that when Congress wanted to make distinctions based on the employment activities of a plan participant, it clearly knew how to do so. For example, just one subparagraph further in the very same statute under review, Congress expressly limited the church plan exemption (Code Section 414(e)) by including conduct requirements. No such limitation, however, appears in Code Section 414(d)'s governmental rules. Tribal governments should be explicitly entitled to ...." (The Profit Sharing/401(k) Council of America)
2005 Retirement Confidence Survey Web Site
The site contains links to the 2005 Retirement Confidence Survey (RCS) Press Release of April 5, 2005; the 2005 RCS Findings published as the April 2005 EBRI Issue Brief [available at http://www.ebri.org/ibpdfs/0405ib.pdf] (32 pages); Fact Sheets: What Might Make More Workers Save? Saving for Retirement in America, Attitudes About Social Security and Medicare, Age Comparisons Among Workers, and Gender Comparisons Among Workers; and, Financial Planning Resources. (Employee Benefit Research Institute)
Majority American Workers Are Sure of a Comfortable Retirement, According to Survey
Excerpt: "A majority of American workers continue to believe they'll have enough money for a comfortable retirement, but few have saved enough to ensure that will happen, a new study shows. The annual Retirement Confidence Survey, released Tuesday by the nonprofit Employee Benefit Research Institute in Washington, D.C., found that 65 percent of workers are 'very confident' or 'somewhat confident' of funding their retirements." (AP via The New York Times; one-time registration required)
Text: Social Security Admin. Should Better Evaluate Whether Workers Understand Their Statements
64 pages. Excerpt: "The Social Security Statement is the federal government's main document for communicating with ... workers about their Social Security benefits. .... GAO conducted a review to examine (1) how well recipients understand the current statement, (2) how the Social Security Administration is evaluating the statement's understandability, and (3) the promising practices used by private sector companies and other .... [Highlights: http://www.gao.gov/highlights/d05192high.pdf]" (Government Accountability Office)
Links to Items on Executive Comp, Benefits in General
An Actuarial Perspective on the 2005 Social Security Trustees Report (PDF)
8 pages. Excerpt: "This issue brief provides an actuarial perspective on the most recent report, together with sufficient background mate-rial for readers to obtain a good understanding of (1) what the trustees are saying about the future financial condition of Social Security and (2) the limitations of the trustees' assessment. The debate over Social Security's financial condition has raised many important questions." (American Academy of Actuaries)
Overview: Disparate Impact Claims Available Under ADEA, Supreme Court Rules
Excerpt: "The Court's ruling, which is consistent with the Equal Employment Opportunity Commission's interpretation of the ADEA, makes it easier for older workers to bring federal age discrimination claims against their employers, and this could include offering new grounds for challenges to the adoption of cash balance plans." (Deloitte)
Overview: U.S. Supreme Court Recognizes ADEA Disparate Impact & Title IX Retaliation Cases as Viable (PDF)
1 page. Excerpt: "In Smith v. City of Jackson, the Supreme Court held the disparate impact theory of recovery was cognizable under the Age Discrimination in Employment Act ('ADEA'). In a disparate impact case, plaintiffs need not show discriminatory intent but, rather, that an employment practice or policy that is facially neutral has an adverse impact on a protected class." (Winston & Strawn LLP)
Companies' Need for Workers and Older Workers Wish for Part-Time Work Is a Fit
Excerpt: "Older Americans are reinventing retirement. As they do, they're prompting federal regulators and human resources departments to change the rules. 'Retirement used to be 'all or nothing' -- you were either retired or employed,' Dallas human resources consultant Barbara O'Neal said. Now, 'more people are trying some combination of retirement and work.'" (The Dallas Morning News via The State.com)
Monthly Benefit News and Developments, April 2005 Edition (PDF)
2 pages. Milliman's Monthly Benefit News and Developments provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits. (Milliman)
Newly Posted Events
The 3rd Chronic Disease Management Strategies - East
in Massachusetts on June 21, 2005
presented by International Quality & Productivity Center (IQPC)
Newly Posted Press Releases
Deloitte CONSULTING 401(k) Benchmarking Survey Uncovers Tremendous Scrutiny Around Plan Investments
(Deloitte)
Labor Department Proposes Expansion of Voluntary Compliance Program
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))
2005 Retirement Confidence Survey: How To Increase Worker Savings? 401(k)s Provide Ideas 5 Percent Employer Match Proves Very Popular Among Workers
(Employee Benefit Research Institute (EBRI))
ACLI Comments on Supreme Court's "IRA" Ruling Today
(American Council of Life Insurers)
National Employee Benefits Day Today - Prime Minister Paul Martin Congratulates Celebrants
(International Foundation of Employee Benefit Plans)
OnlineBenefits Launches the Real Value Statement
(OnlineBenefits, Inc.)
Employers Concerned with Increasing Utilization of High Cost Injectable Medications
(Health Industries Research Companies (HIRC))
Houghton Mifflin Announces New 'Master Student' Textbook to Better Prepare College Students for the Workplace
(Houghton Mifflin Company)
Newly Posted or Renewed Job Openings
Benefits/Compliance Manager
for Established boutique TPA and RIA in E. Montgomery County, PA
in PA
Employee Benefits Associates
for Ice Miller
in IN
Defined Contribution Analyst
for Standard Insurance Company
in OR
Pension Administration Analyst-Entry
for Hewitt Associates
in GA
Employee Benefits Account Representative III
for Brown & Brown of Washington - Tacoma
in WA
Defined Contribution Administrator
for Howard Simon & Associates, Inc.
in IL
Manager, COBRA Administrative Services
for Employee Benefits Firm in Maryland
in MD
Handy Links:
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- Search BenefitsLink
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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