If you'd like to STOP this newsletter, just click on this link: STOP sending this newsletter to me
BenefitsLink
Retirement Plans
Newsletter
To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

April 25, 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)

Text: Save More for Retirement Act of 2005, S. 875, Introduced by Bingaman (PDF)
19 pages. Excerpt: "To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to increase participation in section 401(k) plans through automatic contribution trusts, and for other purposes." (American Benefits Council)

Summary of the Save More for Retirement Act of 2005 (PDF)
2 pages. Excerpt: "This legislation will provide incentives for employers to offer or modify their existing 401(k) and other self-directed retirement plans so that employees are enrolled upon hire unless they opt out of participating. It contains a section that offers specific relief from discrimination testing if a plan meets a set of criteria that has been proven to increase savings for workers." (American Benefits Council)

Council Talking Points on 401(k) Automatic Enrollment and Automatic Acceleration Features (PDF)
1 page. Excerpt: "" (American Benefits Council)

The Profit Sharing / 401k Council of America Shows Support for Bingaman's Automatic Enrollment Bill
Excerpt: "The Profit Sharing / 401k Council of America (PSCA) has come out in support of recently proposed legislation that encourages retirement plans with automatic enrollment and contribution increases. Introduced by US Senator Jeff Bingaman (D-New Mexico) the legislation supports and encourages defined contribution plans that include both automatic enrollment and an automatic increase in a participant's savings rate, unless the participant elects otherwise." (PLANSPONSOR.com; one-time registration required)

Fact Sheet on the Employee Pension Preservation Act of 2005 Introduced April 20, 2005 (PDF)
2 pages. Excerpt: "Sen. Isakson's goal is to establish a payment schedule for unfunded liability that is affordable and practical. The legislation properly balances the interests of all three stakeholders: employees, taxpayers, and airlines." (Senator Johnny Isakson, U.S. Senate)

Voicing 401(k) Operational Violation Internally May Result in ERISA Retaliation Claim, If Fired
Excerpt: "Other courts that have considered the 'inquiry' aspect of ERISA Section 510 have come down on both sides of the issue. The more remarkable aspect of the decision is the amicus brief filed by the Secretary of Labor, with its strongly worded policy considerations in favor of protecting internal complaints and inquiries by providing a potential right of action under ERISA Section 510." (Employee Benefits Institute of America Inc.)

U.S. Agrees to Take Over Four Pension Plans at United Airlines
Excerpt: "The federal government said [April 22] that it had reached an agreement to take over all four of United Airlines' employee pension plans, with a shortfall of $9.8 billion, making it the biggest pension failure since the government began insuring pension benefits in 1974." (The New York Times; one-time registration required)

Airlines Seek to Stretch Out Pension Obligations
Excerpt: "The big airlines are lobbying Congress for what is effectively another bailout, their third plea for assistance since the September 2001 attacks. The deep first-quarter losses they reported this week are being used to bolster their argument. ....... Their argument to Congress is simple: help us fix our pension problem now or risk seeing airlines, employees and taxpayers suffer more in the near future." (The New York Times; one-time registration required)

Overview: The New Bankrup.tcy Law and its Effect on Tax-Favored Funds
Excerpt: "In the event of individual bankrup.tcy, the Bankrup.tcy Abuse Prevention and Consumer Protection Act of 2005 ('BAPCA') creates new rules to protect tax-favored funds, including regular IRA's, Roth IRA's, 403(b) plans, all types of qualified retirement plans, and certificates and accounts known as 529 plans and Coverdell Education Savings Accounts." (theworkplace.biz)

Federal Bankrup.tcy Law Preempts State Retirement Rules
Excerpt: "President Bush signed a bill Wednesday that provides broad protections for benefits under tax-exempt retirement funds. 'The law helps employers who administer retirement plans in multiple states because it makes the law consistent from state to state,' says Jim Kemper, a partner at law firm Ice Miller. The bankrup.tcy law will effectively pre-empt states from opting out of the federal exemption list relating to tax-exempt retirement funds." (BenefitNews Connect)

New Washington State Law Allows Terminally Ill to Pocket Retirement Funds
Excerpt: "Washington Gov. Christine Gregoire has signed into law a bill that will allow Kennewick's Terry Flores and other terminally ill public employees to keep the money they're otherwise required to put into a retirement they'll never have." (Tri-City Herald)

Opinion: Why the Baby Boomers Won't Wreck the Market When They Retire
Excerpt: "You've probably heard the predictions that a prolonged bear market will begin as the baby boomers retire and sell their stocks. While the historical record provides some support for such a view, a new study suggests that the consequences of the population's aging will not be anything nearly that bad." (The New York Times; one-time registration required)

NCTR Memo on the Repeal of Pick Ups Included in Congressional Proposals (PDF)
5 pages. Excerpt: "The staff members of the Joint Committee on Taxation (JCT) have presented options for changing the tax treatment of pensions and other provisions of the Internal Revenue Code. The JCT staff member's publication, Options to Improve Tax Compliance and Reform Tax Expenditures, JCS-02-05 (2005), contains five options that directly affect state and local government (SLG) retirement and other benefit plans." (National Council on Teacher Retirement)

Few Mexicans Investing Their Pension Funds in Stocks
Excerpt: "It's been three months since regulatory changes allowed millions of Mexicans to pour part of nearly $45 billion in pension assets into the country's surging ...." (AP via BusinessWeek Online)

CEPR Updates Social Security Benefits Calculator
Excerpt: "This calculator compares current-law Social Security benefits to the 'Bush Plan' based on Model 2 from the President's Commission and 2005 State of the Union proposal, which includes private accounts paid for up to 4 percentage points of the employee's taxable payroll. Modified 20 April 2005." (Center for Economic and Policy Research)

Opinion: Freedom, Responsibility ... and What? Social Security Reform — an Explanation
Excerpt: "Social Security funding, as a plot device, makes for a languidly paced political thriller. The president discovers a ticking time bomb that's been sitting in plain view for seventy years. It must be disarmed, either with mildly risky partial privatization or with somewhat hazardous tax and benefit adjustments. Cut the blue-state wire? Cut the red-state wire? [This article originally appeared in the May, 2005 issue of the Atlantic.]" (Atlantic via Cato Institute)

Opinion: Social Security Private Accounts, Federal Borrowing, the Budget Deficit, and Priorities
Excerpt: "Whatever you think of President Bush's proposal to let people divert a third of their Social Security payroll taxes into new private accounts, one thing seems a mystery. If the White House and its allies think that private accounts are such a good idea, why don't they propose paying for the fiscal hole that the payroll tax diversion creates, rather than borrowing a fresh $200 billion or so each year for a few decades?" (The New York Times; one-time registration required)

AARP Study Shows 50-Somethings Rely on Social Security Benefits
Excerpt: "A group prominent in the fight against President Bush's plan to push for private accounts in Social Security says people near or in retirement are relying increasingly on the federal program, underscoring the need to protect their benefits." (AP via The Washington Post; one-time registration required)

Just the Facts on Retirement Issues: National Saving and Social Security Reform (PDF)
6 pages. Excerpt: "This 'Just the Facts' examines how various Social Security reforms could affect saving." (Center for Retirement Research at Boston College)

Overview: IRS Addresses How Medical Expense Exception to 10% Early Distribution Penalty Applies
Excerpt: "'To discourage the use of retirement plan funds...for purposes other than retirement,' an additional 10% early distribution penalty is imposed on distributions from qualified plans, including 401(k) plans, that are made before the participant has reached age 59-1/2, unless an exception applies. One of those exceptions is for distributions used for certain medical expenses." (Employee Benefits Institute of America Inc. (EBIA))


Links to Items on Executive Comp, Benefits in General

Overview: Court Refuses to Enforce Provision Included in SPD but Not in Plan Document
Excerpt: "As the court in this case pointed out, confusion as to what is an ERISA plan document and how it differs from an SPD is common in 'ERISA land.' This case serves as a reminder that an SPD and a plan document are not necessarily the same and that a court may decline to enforce SPD terms that are not incorporated into the formal plan document." (Employee Benefits Institute of America Inc. (EBIA))

Employer's Enrollment Requirement Communication Makes Failure to Provide SPD 'Harmless Error'
Excerpt: "Although the employer succeeded in defending this claim, we encourage employers and plan administrators to provide SPDs as soon as possible, and in any event within the timeframes provided by ERISA. Some employers and plan administrators provide SPDs along with enrollment materials so that employees can make informed decisions about whether to enroll." (Employee Benefits Institute of America Inc. (EBIA))

District Court Dismisses Reduction-in-Force ERISA Suit Brought Against PPL Electric Utilities Corp
Excerpt: "The employer of an employee who received an e-mail about a reduction-in-force program but was not selected for the program did not violate the Employee Retirement Income Security Act (ERISA), a federal judge has ruled. Judge Juan Sanchez of the US District Court for the Eastern District of Pennsylvania has granted summary judgment in favor of the employer, PPL Electric Utilities Corp, ruling that 'ERISA is not offended when a plan reserves to the company the discretion to pick ....'" (PLANSPONSOR.com; one-time registration required)

Washington Regulatory Wrap Up, 2005, As of April 21, 2005 (PDF)
2 pages. The chart of federal regulatory proposals concerning employee benefits of interest to NCTR members has been updated to be current as of April 21, 2005. The federal updates referenced in the chart are available at http://www.nctr.org/federal/index.html. (National Council on Teacher Retirement)

A Chart for Benefits Comparisons for Merging Companies
Excerpt: "Benefits is often a major clashing point for merging companies. Use this chart to help you summarize the major differences between the two organizations." (The M&A Transition Guide via Workforce Management; one-time registration required)

Recordkeeper Misconduct Claim Not Appropriate for Federal Court, District Court Rules
Excerpt: "Just because a plan recordkeeper worked on a plan regulated by the Employee Retirement Income Security Act (ERISA), it does not give a dissatisfied client the right to sue the provider in federal court, a judge has ruled. US District Judge Cynthia Rufe of the US District Court for the Eastern District of Pennsylvania said that plaintiffs Milkis Enterprises and owner Howard Milkis did not seek 'benefits due' them under an ERISA plan." (PLANSPONSOR.com; one-time registration required)

Text: JCT Report: Options to Improve Tax Compliance and Reform Tax Expenditures (PDF)
435 pages. Excerpt: "This report, prepared by the staff of the Joint Committee on Taxation ('Joint Committee staff'), presents various options to improve tax compliance and reform tax expenditures. This report is prepared at the request of Senate Finance Committee Chairman Charles Grassley and Ranking Member Max Baucus. A copy of their letter follows this Introduction and Summary. [The report was originally published January 27, 2005.]" (Joint Committee on Taxation)


Newly Posted Events

Retirement Plan Insights - Strategic Retirement Planning Seminars
in Nevada on September 27, 2005
presented by McKay Hochman Co., Inc.


Newly Posted Press Releases

Sentinel Benefits Hosts 5th Annual Educational Exchange
(Sentinel Benefits)

Assistant Secretary of Labor Ann L. Combs Visits Kansas City To Highlight President’s Plan for Retirement Security
(U.S. Department of Labor, Employee Benefits Security Administration)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

COBRA Administrator
for Morneau Sobeco
in PA

Internal New Business Assistant
for Leggette Actuaries, Inc.
in TX

Fixed Income Trading Specialist
for Vanguard
in PA

Account Manager - Small Group
for Melita Group
in CA

401(k) Consultant
for Pension Consulting/Services Firm
in MI

401(K) Plan Administrator
for Turning Point Associates, Inc.
in NJ




Handy Links:

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: