| BenefitsLink Retirement Plans Newsletter |   |
April 11, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
Software for 401(k), DB and Flexible Benefits DATAIR's IMPROVED BENEFIT ADMINISTRATION SOFTWARE for 401(k), Defined Benefit and Cafeteria/Flex plans. Designed for administrators and consultants. System modules include 5500s -- Proposals -- Administration -- Plan Documents -- Client & Task Manager. Training and support included. For free demo versions and pricing, contact sales@datair.com or call 1-888-328-2474.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Upcoming Dilemma: Treat 401(k) Deferrals as Roth After-Tax Contributions? (PDF)
3 pages. Excerpt: "[F]or plans that will permit Roth 401(k) contributions on January 1, 2006, systems will need to be put in place by January 1, 2006, and participants will need to make their initial decisions in January of 2006 or prior thereto. Separate accounting of Roth accounts will be necessary. Plan sponsors of 401(k) plans are not required to amend their plans to allow participants to make Roth elections. The question is: Should a sponsor amend its plan to permit Roth deferrals?" (Allen Buckley, Esq. of Smith Moore LLP)
Retirement Plans with High Fees, Low Returns, and No Education for One and a Half Million Teachers
Excerpt: "[R]oughly 1.5 million teachers at the nation's public schools have put their retirement savings into insurance plans, for a total $120 billion in assets. The business is stoked by some of the biggest names in insurance: AIG, the world's largest insurer; ING; AXA; and MetLife. Some firms pay first-year commissions as high as 9% to agents, who troll school campuses for prospects." (Forbes.com)
Overview: U.S. Supreme Court Holds IRAs Exempt from Estate under Bankrup.tcy Code Exemptions
Excerpt: "The status of IRAs in bankrup.tcy proceedings is ... important to employees who roll money out of their employer-sponsored retirement plans. While pension benefits remain in a qualified plan, they are free of creditors' claims in bankrup.tcy. However, once the benefits leave the qualified plan, the protection may be lost. This ruling provides clarity in states where the Bankrup.tcy Code exemptions are available, but the Bankrup.tcy Code exemptions may not be available in all states." (Employee Benefits Institute of America Inc. (EBIA))
Dividing Assets in Divorce Is Tricky: Stability of Pension and Retirement Accounts Questionable
Excerpt: "The uncertain future of corporate pensions has permeated an area of personal finance that most people don't like to think about: divorce." (The Dallas Morning News via IndyStar.com)
New Edition of Selling to an ESOP
The NCEO presents excerpts from the new edition of Selling to an ESOP, a comprehensive guide for owners, managers, and advisors of closely held companies who are considering or implementing an employee stock ownership plan (ESOP). (National Center for Employee Ownership (NCEO))
Bill Will Push New Real Estate Fund for the Federal Employees' Thrift Savings Plan
Excerpt: "The Thrift Savings Plan might be gaining a real estate fund option, according to legislation that will be introduced Monday by two members of the House Government Reform Committee. Rep. Jon Porter, R-Nev., chairman of the House Government Reform Subcommittee on the Federal Workforce and Agency Organization, and Rep. Chris Van Hollen, D-Md., announced Friday that they will introduce a bill to add a real estate investment trust fund option to the Thrift Savings Plan." (GovExec.com)
Massachusetts Considers Opening State Pension Fund to Investment by All Residents
Excerpt: "Massachusetts State Treasurer Timothy Cahill is considering a proposal that would allow all residents to invest in the state pension fund, giving them access to top managers and increasing the size of the already formidable fund. Cahill has consulted with US Representative Joseph Kennedy II - the man with whom the plan originated - and is looking into allowing all state residents unfettered access to the managers, who attempt to earn at least 8.25% a year on pension money, ...." (PLANSPONSOR.com; one-time registration required)
In Chile, Public Pension System Is a Safety Net with Some Holes
Excerpt: "The vastly different experiences of pensioners in Chile suggest that any shift to a private-accounts system offers promise and problems. For nearly a quarter of a century, this small, homogeneous country has operated a partially privatized pension system that has become one of the most studied and debated free-market experiments in the world. Conservative politicians have extolled its virtues. President Bush has cited it as a model for his push to restructure Social Security." (The Washington Post; one-time registration required)
New United Kingdom Pensions Regulator Issues Plan Whistleblower Guidance
Excerpt: "The Pensions Regulator, the UK's new employer pension overseer, has issued its first set of rules – in this case, governing how to report illegal pension activities. According to the agency's announcement of the first code of practice release, the document covered reporting breaches. New UK legislation, which became effective this week, extended the current reporting duty to a wider group of pension professionals." (PLANSPONSOR.com; one-time registration required)
Mutual Funds that Age with Their Investors
Excerpt: "For many investors, finding the right mix of stocks and bonds is a task better left to a professional. But there is a middle ground between going it alone and hiring a financial adviser: picking a mutual fund that blends stock, bond and money market funds all in one, and that tailors the investment mix to the approximate year you plan to retire." (The New York Times; one-time registration required)
Adding Balance to Retirement Investing
Excerpt: "New investors are often told to buy a balanced mutual fund, perhaps something like the Vanguard Star fund, as they begin their investment lives. It is solid advice. This type of fund - Fidelity Balanced is another example - offers a mixture of stocks and bonds. That's where the term 'balanced' comes from, even though these funds tend to be slightly more heavily invested in stocks." (The New York Times; one-time registration required)
What Is Progressive Price Indexing and What Would Be Its affect on Social Security Benefits? (PDF)
6 pages. Excerpt: "One approach to cutting benefits under consideration by the administration is to change how benefits are indexed. An earlier Just the Facts explored the implications for benefits of moving from 'wage indexing' of benefits to 'price indexing.' This Just the Facts describes a proposal for 'progressive price indexing.'" (Center for Retirement Research at Boston College)
Links to Items on Executive Comp, Benefits in General
IRS Publishes April 11, 2005 Special Edition of Employee Plans News
Excerpt: "This Special Edition contains information regarding the EP Examination field structure being realigned from six areas into five areas. In addition, a special edition of the DOL Corner discusses an expanded and simplified Voluntary Fiduciary Correction Program." (Internal Revenue Service)
Commentary: Changes to EBSA's Voluntary Fiduciary Correction Program
Excerpt: "This week EBSA announced that it was amending and restating the Voluntary Fiduciary Correction Program ('VFC') which permits ERISA fiduciaries to correct certain violations that occur under ERISA. Generally, under the program, applicants are required to fully correct any violations, restore to the plan any losses or profits with interest, and distribute any supplemental benefits owed to eligible participants and beneficiaries." (Attorney B. Janell Grenier via BenefitsBlog.com)
Overview: DOL Revises VFC Program, Adds New Mistakes to List of Transactions that Can Be Corrected
Excerpt: "The DOL's Voluntary Fiduciary Correction Program (VFC Program) allows persons potentially liable for fiduciary breaches to voluntarily apply to the DOL and correct specific breaches in exchange for a 'no action' letter and relief from penalties under ERISA Section 502(l). This Notice contains numerous changes that update and revise the Program, ...." (Employee Benefits Institute of America Inc)
Overview: U.S. Supreme Court Extends Disparate-Impact Liability to Age Discrimination Claims
Excerpt: "Employers now face potential liability for harm stemming from unintentional age discrimination and need to tread especially carefully and seek the advice of employment counsel before implementing a policy that could adversely affect older employees." (Mintz Levin Cohn Ferris Glovsky and Popeo P.C.)
Legal Decision Raises Bar for Effective Internal Communication -- E-Mail and Employee Rights
Excerpt: "When you communicate new or revised policies, procedures and benefits, your goals probably include clear, accurate and timely information. But are you double-checking to make sure your messages and delivery channels are effective and meet a new legal litmus test? A recent ruling in the Federal District Court of Massachusetts (Campbell v. General Dynamics Government Systems Corporation, D. Mass. Civ. No. 03-11848 2004-NG) may surprise you and influence you to put more thought ...." (Employee Benefit News)
Overview: New Law Affecting Non-Qualified Deferred Compensation Effective January 1, 2005
Excerpt: "On October 11, 2004, Congress passed the American Jobs Creation Act (the 'Act') and on October 22, 2004, President Bush signed it into law. The Act added Section 409A to the Internal Revenue Code ('Code'). Section 409A establishes new rules, obligations and penalties for employers and others sponsoring non-qualified deferred compensation plans for employees, independent contractors and others deferring compensation receivable for services." (Sanders, Schnabel & Brandenburg, P.C.)
Trucker Huss March 2005 Benefits Report (PDF)
9 pages. The report contains articles titled: CMS Issues Final Regulations on Medicare Part D and Use of an Administrative Committee to Address Fiduciary Obligations of a Retirement Plan Sponsor. (Trucker Huss, APC)
Welcome to the Club -- Costco Shows the Way with Above Average Wages and Benefits for Employees
Excerpt: "Costco pays generous wages and benefits in accord with CEO Jim Sinegal's maxim: 'Taking care of your employees and turning inventory faster than your people is good business.' .... In addition to offering some of the best wages and benefits in the retail industry, Costco rewards employees with bonuses and other incentives." (Workforce Management; one-time registration required)
Proposed Extension of Information Collection Request Submitted for Public Comment & Recommendation (PDF)
2 pages. Excerpt: "SUMMARY: The Department of Labor (Department), as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA 95)." (Federal Register via The ERISA Industry Committee)
Newly Posted Events
401(k) Plans: Managing Regulatory and Market Changes
Nationwide on April 21, 2005
presented by International Foundation of Employee Benefit Plans
WEB Atlanta's Winner of the 2004 Achievement in Corporate Excellent Award
in Georgia on April 21, 2005
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter
Newly Posted Press Releases
International Foundation Honored as Best Trade Association Magazine
(International Foundation of Employee Benefit Plans)
The National Business Coalition on Health and The Leapfrog Group Announce First Multi-Stakeholder Workshop on Incentive & Rewards
(National Business Coalition on Health)
HIPAA Security Rule: Prepare for Compliance
(Bell, Boyd & Lloyd LLC)
Newly Posted or Renewed Job Openings
Client Services Consultant 2 openings Cleveland & San Antonio
for American United Life Insurance Company/One America
in OH, TX
Compliance Specialist
for MassMutual Financial Group
in MA
Sales Consultant
for LPL Financial Services
in CA
Defined Contribution Plan Administrator
for CBIZ Actuarial & Benefit Consultants
in AZ
FASCorp Account Administrator
for Great-West Corporate
in CO
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.
Published by:
BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
Editor and Publisher: David Rhett Baker, J.D.
Housekeeping: