| BenefitsLink Retirement Plans Newsletter |   |
April 13, 2005
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Coming Soon . . . the Roth 401(k) -- So Why Do We Need the Employer Retirement Savings Account? (PDF)
5 pages. Excerpt: "The 401(k) plan is the most popular type of employer-sponsored retirement plan. The Bush administration has proposed replacing the myriad of individual account retirement plans – 401(k)s, 403(b)s, and 457(b)s – with a single type of individual savings account – the employer retirement savings account. The ERSA would be an after-tax, Roth IRA-style account, where participants could elect to contribute up to $15,000 year on an after-tax basis." (Pension & Benefits Week via Groom Law Group)
The Automatic 401(k): A Simple Way to Strengthen Retirement Savings (PDF)
16 pages. Excerpt: "A growing body of evidence suggests that the judicious use of default arrangements -- arrangements that apply when employees do not make an explicit choice on their own -- holds substantial promise for expanding retirement savings. The effects appear to be particularly promising for middle- and lower-income households, who have the greatest need to increase their savings." (The Retirement Security Project)
Capital Market Update of Pension Funds: Funded Ratio Stable in March, According to Towers Perrin (PDF)
4 pages. Excerpt: "The monthly Capital Market Update is designed to support our clients in the ongoing financial management of their U.S. retirement plans. Towers Perrin has been tracking the asset/liability performance of a hypothetical benchmark pension plan since 1990. This report reviews how capital market performance affected pension plan financing, with a focus on linked asset/liability results." (Towers Perrin)
White Paper: Concerns Regarding Spot Valuations and Back–End Smoothing (PDF)
5 pages. Excerpt: "This paper discusses the critical need for predictability with respect to the application of the defined benefit funding rules and why proposals to use spot valuations of interest rates and assets lead to unmanageable unpredictability. The paper then discusses why 'back-end smoothing' proposals will not adequately address the need for predictability. The paper also includes a section that shows, based on historical data, that spot valuations are not accurate." (American Benefits Council)
More Commentary, Questions, and Articles on the Rousey Supreme Court IRA/Bankrup.tcy Decision
Excerpt: "Commentators have been emphasizing that the 'reasonably necessary' requirement of the bankrup.tcy exemption will lessen the benefits of the Supreme Court's Rousey opinion for IRA holders with large amounts in their IRAs. They go on to note that qualified plans subject to ERISA will likely offer more protection for such debtors under the Patterson v. Shumate case than IRAs offer for debtors under the Rousey v. Jacoway case." (Attorney B. Janell Grenier via BenefitsBlog.com)
Overview: New Required Minimum Distribution Rules Challenge Variable Annuity Carriers (PDF)
2 pages. Excerpt: "A new IRS regulation will impact calculations of required minimum distributions from variable annuity contracts starting January 1, 2006. Here's why - the IRS adopted revisions to Treasury Regulations §1.401(a)(9)-6 related to required minimum distributions (RMDs) under deferred annuity contracts, effective June 15, 2004. This effective date was extended to December 31, 2005 to provide time for adjustments needed to comply with the regulations." (National Underwriter via Milliman)
Pension Funds May Question Morgan Stanley: Performance at Securities Firm Focus of Concerns
Excerpt: "The Council of Institutional Investors, a group of major public and corporate pension funds, may vote today to request a meeting with Morgan Stanley directors over the embattled Wall Street firm's performance, a council member fund confirmed yesterday." (The Boston Globe)
Lawmakers Weigh Slowing Growth Scale for Social Security
Excerpt: "As President Bush and lawmakers debate what ... to do about Social Security, one option that's attracting increasing attention would slow the growth of future retirement benefits by changing the way they're calculated. In recent weeks, the president and some lawmakers have declared themselves open to considering at least a partial change in how future Social Security benefits are calculated. The changes involve using the inflation rate as the basis for annual adjustments ...." (Knight Ridder Newspapers via Yahoo! News)
Testimony on Role of Employer-Sponsored Retirement Plans in Increasing National Savings (PDF)
12 pages. Testimony of James A. Klein of the American Benefits Council before a hearing of the Senate Special Committee on Aging on April 12, 2005. (American Benefits Council)
Most Big Corporate Pension Funds Showed Gains in 2004
Excerpt: "The health of corporate pension funds stabilized in 2004, but the widespread investment losses most funds suffered in recent years will continue to undermine corporate earnings for at least another year, according to a study by Milliman Consultants and Actuaries." (The New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
New California Law Modifies Reach of Workplace Domestic Partnership Rights
Excerpt: "Effective [January 2005], AB 205 (codified for the most part as California Family Code Section 297.5) gives California registered domestic partners essentially all of the rights and responsibilities that are granted to, or imposed upon, married persons under California law. (Article originally published February 2, 2005)." (Los Angeles Daily Journal via Reish Luftman Reicher & Cohen)
Newly Posted Events
Super Benefits Boot Camp
in Georgia on May 17, 2005
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter
Newly Posted Press Releases
PBGC Restructures For Better Customer Service Changes Result in New Contacts for Pension Professionals
(Pension Benefit Guaranty Corporation (PBGC))
William Anthes, NEFE, and Michael Clowes, P&I, Receive EBRI Lillywhite Award For Contributions to Economic Security
(Employee Benefit Research Institute (EBRI))
Council to Senate Aging Panel: Employer-Sponsored Retirement Plans Important For National Savings
(American Benefits Council)
Treasury and IRS Issue Ruling on Contributions of Spouses to HSA Accounts
(U.S. Treasury Department and Internal Revenue Service)
Testimony of Assistant Secretary of Treasury Mark J. Warshawsky Before The United States Senate Special Committee on Aging
(U.S. Department of Treasury)
Corporate Benefit Services, LLC., Announces Unprecedented Survey
(Corporate Benefit Services, LLC.)
Newly Posted or Renewed Job Openings
Retirement Plan Specialist
for Diversified Investment Advisors
in DC
Sr. Technical Customer Support Representative
for Charles Schwab
in NC
Client Account Manager
for ING U. S. Financial Services
in MA
Client Account Manager
for ING U. S. Financial Services
in MA
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