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April 8, 2005
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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)
401(k) Plan Automatic Enrollment Support Bill Introduced in Congress
Excerpt: "A Democratic Representative in the US House has introduced a bill that would make it easier for employers to automatically enroll new employees in a company 401(k) plan. US Representative Rahm Emanuel (D-Illinois) on Thursday introduced the 401(k) Automatic Enrollment Act of 2005 (HR 1508), which is the third proposal he has introduced this year focused on savings and retirement outside of Social Security, according to a press release from his office." (PLANSPONSOR.com; one-time registration required)

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.... [I]t is crucial that 457(f) plans are designed to avoid the new law's potentially high price." (Brenda Berg, Esq., Faegre & Benson LLP)

Text of Rev. Proc. 2005-25: Safe Harbors for Valuing Life Insurance Contracts Distributed by Plans (PDF)
14 pages. Excerpt: "After the issuance of Rev. Proc. 2004-16 ... [c]ommentators asserted that the formulas did not function well for certain types of traditional policies. In addition, commentators were concerned about the possible double-counting of dividends under the formulas, and the fact that the formulas did not make an explicit adjustment for surrender charges, withdrawals, or distributions. The Service has determined that adjustments to the safe harbors are appropriate." (Internal Revenue Service)

In Praise of the Lump Sum Distribution for Retirees, and Their Advisors
Excerpt: "When a retiring client's employer presents him with a choice between a monthly pension check and a lump-sum payment, the choice is usually a simple one. Happily, the move that is typically best for the client -- accepting the lump -- also usually ends up being the most lucrative one for the advisor." (Registered Rep)

Bill Ending Lucrative Pension Plan Heads to Missouri Governor
Excerpt: "After complaints that both Democrats and Republicans have abused a lucrative state retirement system, legislation abolishing it headed to the governor's desk Thursday. The measure by Sen. Jason Crowell, R-Cape Girardeau, does away with the administrative law judge retirement system, which provides much better benefits than regular state employees receive." (The Kansas City Star; one-time registration required)

Web Site Maintained on Legislation before Congress Affecting NCPERS – The Voice for Public Pensions
Excerpt: "NCPERS tracks federal legislation that has been signed into law and bills that are pending before the Congress affecting public sector pension funds." (National Conference on Public Employee Retirement Systems (NCPERS))

California's Schwarzenegger, for Now, Shelves Pension Initiative
Excerpt: "Coming under fire from public employees' unions, Gov. Arnold Schwarzenegger of California said yesterday that he would drop, for now, a high-priority plan to bring about the restructuring of California's big public pension funds through a ballot initiative." (The New York Times; one-time registration required)

Securities and Exchange Commission Adopts Voluntary Redemption Fee Rule for Short-Term Trades (PDF)
3 pages. Excerpt: "The Securities and Exchange Commission (SEC) released final rules that address short-term trading in shares of open-end investment companies (e.g., mutual funds). Unlike the proposed rules, the final rules allow, but do not require, funds to impose a redemption fee of up to two percent on short-term trades." (Mellon Financial Corporation)

Opinion: Open Letter to Progressive Policymakers on Clear Lines on Progressive Savings Accounts
Excerpt: "With the public overwhelmingly rejecting the White House's efforts to partially privatize Social Security through the diversion of payroll taxes into private accounts, there is already a growing conservative effort to use new rhetoric and designs to blur the distinctions between harmful privatization options and the types of progressive savings options outside of Social Security that are deserving of progressive support." (Center for American Progress)

Links to Items on Executive Comp, Benefits in General

Towers Perrin Regulatory Update for April 8, 2005 (PDF)
3 pages. The edition includes articles on: Increased Scrutiny of Actuarial Assumptions by Auditors; Medicare Part D; DOL Issues Model USERRA Notice; IRS Removes 90-Day Notice Period for Eliminating Optional Forms of Benefit from DC Plans; IRS Issues Proposed Regulations on Roth Contributions to 401(k) Plans; Funded Status Notice for Multiemployer Pension Plans; ISS Updates Proxy Voting Guidelines for 2005 Annual Meetings; and, Accelerated Vesting of Underwater Stock Options. (Towers Perrin)

Ninth Circuit Defines 'Extraordinary Payments' under Sarbanes-Oxley's Pre-Litigation Freeze Rules (PDF)
2 pages. Excerpt: "The U.S. Court of Appeals for the Ninth Circuit affirmed a district court's order temporarily placing in escrow more than $37.6 million in severance payments to the former CEO and CFO of Gemstar-TV Guide International, Inc. holding that the payments were 'extraordinary' under Section 1103 of the Sarbanes-Oxley Act of 2002." (Powell Goldstein LLP)

Overview: Supreme Court Expands Scope of Age Discrimination Law
Excerpt: "On March 30, 2005, in a decision that will change the landscape of age discrimination litigation, the U.S. Supreme Court ruled in Smith v. City of Jackson that workers age 40 and older may prove discrimination under the Age Discrimination in Employment Act (ADEA) using a disparate impact theory." (Littler Mendelson, P.C.)

Overview: Court Invalidates New York City Equal Benefits Law (PDF)
2 pages. Excerpt: "Practice Pointer. As a result of the Appellate Division's ruling, employers who contract with the City of New York do not need to comply with the Equal Benefits Law. The City Council, however, has indicated its intention to appeal the Appellate Division's ruling." (Ballard Spahr Andrews & Ingersoll, LLP)

Brief Analysis: Social Security & Medicare Forecast: 2005
Excerpt: "Every year, the Social Security and Medicare Trustees examine the short- and long-term health of these programs, and issue reports that highlight the financial burdens they will create for future generations if nothing is done to reform them. This year's reports show Social Security and Medicare will consume an ever-increasing portion of workers' incomes unless the government either breaks its promises to future retirees or makes significant changes to our elderly entitlement system." (National Center for Policy Analysis)

U.S. Justice Department Settles USERRA Case with Bridgestone Tire
Excerpt: "Bridgestone/Firestone North American Tire has agreed to advance an Army National Guardsman within its pay schedule and give him back pay as part of an out-of-court settlement with the federal government. According to a BLR.com news report, the US Justice Department had sued the tire company, alleging that it failed to follow the Uniformed Services Employment and Re-employment Rights Act of 1994 ... by not advancing the guardsman during a 15-month period while he was on active duty." (PLANSPONSOR.com; one-time registration required)

Newly Posted Events

2005 Benefits Solutions Conference
in Illinois on April 14, 2020
presented by WEB

Drug Advertising and Promotion
in Pennsylvania on June 13, 2005
presented by American Conference Institute

Stress in the Workplace - A Twenty-First Century Epidemic
in Massachusetts on April 20, 2005
presented by Worldwide Employee Benefits Network (WEB)

Newly Posted Press Releases

Eisner Retirement Solutions Expands Offerings
(Eisner Retirement Solutions LLC)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

OmniPlus Senior Business Analyst
for Hand Benefits and Trust
in TX

Plan Consultant
for Hand Benefits and Trust
in TX

New Business/Conversion Technical Analyst
for Hand Benefits and Trust
in TX

Plan Specialist
for Transamerica
in CA

Senior Plan Administrator
for Valley Forge Asset Management Corp.
in PA

Retirement Plan Investment Consultant
for Plante & Moran, PLLC
in MI

Account Coordinator, employee benefits broker
for ABD Insurance and Financial Services
in CA

Conversion/New Business Project Manager
for Hand Benefits and Trust
in TX

OmniPlus Senior Technical Analyst
for Hand Benefits and Trust
in TX

Senior Benefits Administrator
for Pulte Homes Inc.
in MI

Marketing Analyst, employee benefits broker
for ABD Insurance and Financial Services
in CA

Pension Analyst
for Greenbook Pension Services, Inc.
in CA

Senior Systems Analyst
for Great-West Healthcare
in CO

Benefits Service Manager
for Hewitt Associates
in IL

Experienced Project Manager
for Hewitt Associates
in IL

Health & Welfare Consultant
for Hewitt Associates
in IL

Retirement Plan Analyst
for Charles W. Cammack Associates, Inc.
in NJ, NY



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