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April 6, 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)
Practitioner's March 17, 2005, Forum Discussion on Proposed Roth 401(k) Regulations
Excerpt: "The following is the transcript of an informal discussion of employee benefit practitioners held in Washington, DC on March 17, 2005. The topic centers on recently issued IRS proposed regulations explaining Roth 401(k) accounts." (BNA Tax Management)

DOL Proposed Rules Allow Plans to Correct Pension Mistakes
Excerpt: "The Labor Department on [April 6, 2005] will formally propose rules to expand a voluntary program that allows employers to report pension plan mistakes they uncover, correct the mistakes and not be penalized by the department." (Business Insurance)

Overview: IRS Proposed Rules for Roth 401(k) Accounts (PDF)
2 pages. Excerpt: "Finally, the proposed rules provide guidance only on Roth 401(k) accounts. They do not cover Roth 403(b) arrangements. We expect the IRS to issue guidance on Roth 403(b) arrangements when the final Section 403(b) regulations are published later this year. We anticipate that the rules relating to Roth 403(b) accounts will closely resemble the rules that apply to Roth 401(k) accounts." (Prudential Retirement)

Does Your Defined Contribution Plan Have a Multimillion-Dollar Leak? How to Maximize Returns
Excerpt: "During the stock market boom of the 1990s, employees were earning 20% to 30% in their retirement plans. So saving an extra 1% to 2% in expenses didn't seem that important. But with the reality of reduced returns in the coming years, there's a renewed and heightened awareness on making every dollar in a retirement plan count." (Hewitt Associates)

401(k) Plan Participants May See Better Investment Options
Excerpt: "Poor performance among many 401(k) plans in recent years has encouraged some employers to improve the way they choose what investment options to offer workers, according to a survey released [April 5, 2005]." (Dow Jones Newswires via SmartMoney.com)

Final 401(k) Regulations: Part Four in Series Focuses on the Aggregation and Disaggregation of Plans
Excerpt: "The aggregation and disaggregation rules for cash or deferred arrangements (CODAs) are found in Treasury Regulation 1.401(k)-1(b)(4). The final regulations consolidate the rules regarding identification of CODAs and plans for purposes of demonstrating compliance with the requirements of section 401(k). Paragraph (b)(4) of the final regulations contains the exclusive rules for aggregating and disaggregating plans for cash or deferred arrangements." (McKay Hochman Co., Inc.)

Fidelity Taps Alternative to Mutual Funds
Excerpt: "Fidelity investments' creation of a separate business unit dedicated to institutional, non-mutual-fund business reflects an interesting and significant trend: 401(k) plan sponsors are again adding collective investment trusts to their plans." (Workforce Management; one-time registration required)

Will the Auto Industry Pensions Be the Next Big PBGC Bomb?
Excerpt: "The $45 billion to $50 billion collective pension underfunding in the US auto industry could very well be the next ticking time bomb heading for the nation's insurer of private sector pensions." (PLANSPONSOR.com; one-time registration required)

PBGC Proposes New Liability Rule for Certain Plant Shutdowns (PDF)
2 pages. Excerpt: "The Pension Benefit Guaranty Corporation has proposed alternative rules for calculating the expected pension liability when a single employer ceases operation at a facility and more than 20% of the employees who are plan participants are separated from employment." (Mellon Financial Corporation)

Airlines Seek Pension Relief from Congress
Excerpt: "Some U.S. airlines are hoping spring will bring relief for the industry's looming pension crisis in the form of government reform. But while House and Senate committees could take up pension proposals this month, it remains to be seen whether they'll offer the specific industry help for which several carriers have been lobbying vigorously." (TheStreet.com)

Legislative Outlook, March 2005: The Budget & PBGC Premiums; SEC Finalizes Short-Term Trading Rule
Excerpt: "In this article [Chicago Consulting Actuaries reviews] the current legislative situation, focusing on recent efforts to increase PBGC premiums through the budget process. Then ... discuss[es] recently finalized mutual fund short-term trading redemption fee rules." (Chicago Consulting Actuaries, LLC)

Exit Strategy for Departing Employees with Employer Stock in Qualified Plans
Excerpt: "When leaving the company, employees who own significant amounts of employer stock in a qualified plan--especially those who are younger--may benefit by treating the stock differently from other plan assets. Conventional wisdom may suggest leaving the stock in the plan or rolling it into an IRA. However, when the proceeds are liquidated in retirement, they are typically taxed as ordinary income, currently at rates of up to 45%--and possibly even more if state or local taxes apply." (Financial-Planning.com)

Civil Service Retirement System Enrollment Is Declining But Not Disappearing
Excerpt: "Since the began being phased out in the mid-1980s, the number of active-duty government workers enrolled in it has dropped to about 742,000, fueling speculation about its viability." (The Washington Times)

Alaska Grapples with Pension Reform
Excerpt: "Following the lead of other states, Alaska is grappling with its defined benefit pension system, with multiple reform proposals sitting in a stalled legislature. The state House and Senate both have proposals to overhaul the state's defined pension system, but linkage to other issues and calls for second opinions are slowing any changes down, ...." (PLANSPONSOR.com; one-time registration required)

Society of Actuaries Issues Call for Papers on Re-Envisioning Work & Retirement in the 21st Century
Excerpt: "All papers, based on accepted abstracts, must be completed and submitted no later than February 1, 2006. The symposium or conference to present the papers, if appropriate, will be held no earlier than Spring 2006." (Society of Actuaries)

Opinion: Neutering Social Security
Excerpt: "When George W. says he's going to 'fix' our Social Security system, I feel like a dog that's just been told, 'We're taking you to the vet to get you fixed.' Whether it's to dogs or to We the People, George's message is the same: This radical surgery is needed for your own good. If, however, you suspect that something besides your welfare is really motivating him ... you're exactly right." (Jim Hightower via Axis of Logic)

To Screen or Not to Screen Investments? That May Not Be the Question for Plan Sponsors
Excerpt: "Part two of this two-part article examines the opportunities and limitations that social and environmental sustainability screens present to pension funds and other institutional investors." (SocialFunds.com)

Workers Say 'Show Me the Money' and Their Retirement Plan Participation Will Increase
Excerpt: "Workers in a new survey have a suggestion for plan sponsors searching for the Holy Grail of convincing participants to save for retirement: institute a matching employer contribution of at least 5%. A news release from the Employee Benefit Research Institute (EBRI) about the 2005 Retirement Confidence Survey (RCS) poll ... said some 72% of respondents reported that such a company match would be much more likely or somewhat more likely to get them to join up." (PLANSPONSOR.com; one-time registration required)

Facts from EBRI: The History of Retirement Plans and Current Status (PDF)
Pages 6-11 of 12 pages. This 'Facts from EBRI' on the History of Retirement Plans contains updated data on the background and current status of the U.S. retirement system. (Employee Benefit Research Institute)


Links to Items on Executive Comp, Benefits in General

Text of Restated Voluntary Fiduciary Correction Program (PDF)
33 pages. Excerpt: "[C]hanges to the Program are needed to further encourage utilization of the Program. These changes will improve administration of the Program by EBSA's Regional Offices by which the revised VFC Program will continue to be administered. To this end, EBSA is publishing in this Notice an updated and revised VFC Program ... EBSA is making the revised VFC Program effective on publication of this Notice ..." (Employee Benefits Security Administration, U.S. Department of Labor)

Text of Proposed Change in Voluntary Fiduciary Correction Program for Sale of Illiquid Asset (PDF)
4 pages. Excerpt: "[T]he additional eligible transaction generally includes the purchase of an asset by a plan where the asset has been determined to be illiquid as described in the revised VFC Program, and the sale of the illiquid asset by the plan to a party in interest." (Employee Benefits Security Administration, U.S. Department of Labor)

Supreme Court Opens Door for Age Discrimination Actions Under 'Disparate-Impact' Theory (PDF)
2 pages. Excerpt: "In a very important decision, the Supreme Court has ruled in Smith v. City of Jackson, Mississippi, that employees can sue their employers under ADEA when they can show that they were adversely affected because of their age. In other words, the court ruled that it is not necessary to show intentional discrimination to bring an action under ADEA." (Mellon Financial Corporation)

Domestic Partner Law Upheld in California : It Doesn't Violate Ban on Same-Sex Marriage, Court Says
Excerpt: "California's far-reaching domestic partner law, which gave thousands of same-sex couples many of the same rights as spouses, survived another court test Monday when a state appeals panel ruled that it did not violate the voter- approved ban on same-sex marriage." (San Francisco Chronicle)

Preparing for an IRS Executive Compensation Audit (PDF)
2 pages. Excerpt: "The Large and Mid-Size Business ('LMSB') division of the IRS announced late last year that it is incorporating the experience gained from its 2003-2004 executive compensation pilot program in its 'package audits.' Specifically, LMSB audits will routinely focus on executive compensation arrangements, including deferred compensation, stock-based compensation, fringe benefits and other issues involving executive compensation." (Miller & Chevalier)

8th Circuit Court of Appeals Rules that Former Employees' Claims of ERISA 510 Discrimination Fail (PDF)
3 pages. Excerpt: "Section 510 of ERISA makes it unlawful for an employer to discharge an employee for the purpose of interfering with the employee's attainment of any rights that she/he is entitled to, or may become entitled to, under an employee benefit plan. When an employer outsources some part of its workforce, outsourced employees may make a claim under ERISA § 510, alleging that it was done to prevent them receiving future benefits." (Gardner Carton & Douglas)

Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers (PDF)
Pages 1-5 of 12 pages. This April 2005 EBRI Notes article examines the data behind and causes of the differences in total compensation costs between state and local government employers and private-sector employers. (Employee Benefit Research Institute)

Hewitt Federal Legislation Quick Guide Updated as of April 5, 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)

Aon's April 2005 Forum Newsletter's Regulatory Developments (PDF)
12 pages. This issue of Regulatory Developments covers 15 developments dealing with new legislation, retirement plans, health and welfare plans, and human resources policies and practices that have occurred since the last issue in December 2004/January 2005. These regulatory developments of general employee benefit interest are on pages 9–12. (Aon Consulting)

Overview: Employment-Based Military Leave Policies and Employment Procedures (PDF)
6 pages. Excerpt: "New legislation and proposed regulations will require companies to review and update military leave policies and employment procedures. This GCD Client Memo highlights important aspects of the recently enacted Veteran's Benefits Improvement Act of 2004 and the long-awaited proposed USERRA regulations issued by the Department of Labor." (Gardner Carton & Douglas)


Newly Posted Events

5500 Pitfalls
in Massachusetts on May 5, 2005
presented by International Society of CEBS - Greater Boston Chapter

Employee Benefits Conference
in New York on May 17, 2005
presented by Foundation for Accounting Education

ERISA Reporting and Disclosure
in Florida on April 20, 2005
presented by International Society of Certified Employee Benefit Specialists - Orlando Chapter

Fall Forum
in Georgia on September 26, 2005
presented by BISYS Retirement Services

Fall Forum
in Minnesota on October 10, 2005
presented by BISYS Retirement Services

Fall Forum
in Massachusetts on October 24, 2005
presented by BISYS Retirement Services

Fall Forum
in California on November 14, 2005
presented by BISYS Retirement Services


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Benefit and Defined Contribution Technical Sales Support Manager
for SEI Investments
in PA

401(k) Plan Administrator
for KB Pension Services, Inc. in Sarasota, FL
in FL

General Administrative Services Representative
for ING U. S. Financial Services
in MS

Pension Plan Associates
for Diversified Investment Advisors
in NY

Pension Admin Systems Analyst
for Hewitt Associates
in GA

HR Benefits and Compensation Assistant
for E! Networks
in CA

401(k) Plan Consultant
for 401(k) Advisors
in CA




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