| BenefitsLink Retirement Plans Newsletter |   |
May 10, 2005
Today's sponsor: ASPPA • Working for America's Retirement™
(Click on company name or banner to learn more.)
| Meeting Midway Conference |
| July 24-27, 2005 * San Diego, CA
Health and welfare issues * 401(k) plans Employee compensation * Actuarial pension issues Health Savings Accounts * Legal & fiduciary issues You don't want to miss this one! Register online today. Brought to you by WP&BC and ASPPA. |
| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
Participation Rises in 401(k) Accounts, According to Hewitt Survey
Excerpt: "More workers are contributing to 401(k) retirement accounts, but many are still too heavily invested in their own company's stock, according to a national survey released ... by Hewitt Associates Inc. Hewitt's annual benchmarking report, titled 'How Well Are Employees Saving and Investing in 401(k) Plans,' found that some 70.3 percent of workers participated in defined contribution plans in 2004, up from 69.8 percent in 2003 and 68.2 percent in 2002." (AP via The Washington Post; one-time registration required)
Opinion: If 401(k) Accounts Were a Howling Success, Wouldn't We Know It?
Excerpt: "The fact that we can't find this information suggests three possibilities: (1) the information isn't known, because nobody has thought to compile it, (2) nobody has an incentive to spend money and time to investigate if they suspect that they won't like what they find, or (3) somebody (or maybe several different people acting independently) has done the research, come up with a bad answer and kept it quiet - a true conspiracy of silence." (Investment News; registration or subscription required)
Rising Tensions Over Pensions: The Bushies Want Companies to Rev Up Retirement Plans
Excerpt: "To bolster pensions and avoid a taxpayer bailout of the PBGC, the Labor Dept. proposed legislation in January that would require many companies to hike their pension-fund spending sharply. The Bushies also want employers to stop using interest-rate assumptions that help smooth out the annual fluctuations in plan assets and liabilities. The Administration says this has added to the shortfall by allowing companies to get away with making smaller contributions to the plans." (BusinessWeek Online)
Administration's Proposal to Make Companies with Junk Credit Ratings Put Extra Cash Into Pensions (PDF)
5 pages. Excerpt: "[I]n addition to annually measuring the health of a pension plan, the administration is suggesting measuring the health of the company sponsoring the pension plan (the 'plan sponsor'). Those companies that are rated unhealthy (or 'financially weak') would be required to pay a higher insurance premium, put additional funds into their pension plans and face certain other limitations than otherwise ''healthy'' companies. [Originally published March 1, 2005]" (Pension & Benefits Reporter via Fiduciary Counselors Inc.)
Defined Benefit Plans in Corporate Transactions Involving Mergers and Acquisitions (PDF)
28 pages. Excerpt: "The issues fall generally into two categories: (1) due diligence to determine the types of benefit plans and their attendant assets and liabilities and (2) dividing responsibility for those liabilities and assets between the buyer and seller. This paper discusses the major issues that are likely to arise in both these areas when negotiating the purchase or sale of a business with a defined benefit plan." (Nell Hennessy via Fiduciary Counselors Inc.)
Shut Down that Company Facility and Pay Up on Pension Liabilities (PDF)
5 pages. Excerpt: "The Pension Benefit Guaranty Corporation ('PBGC'), the U.S. agency which insures defined benefit pension plans, recently issued a proposed regulation on how it intends to calculate and assess pension liability when a facility shuts down. If adopted in final regulations, PBGC may have another enforcement tool to collect extra pension funds." (AIRA Journal)
ABC Comment on Proposed Rule Concerning Termination of Abandoned Individual Account Plans (PDF)
7 pages. Excerpt: "The American Benefits Council (Council) appreciates the opportunity to comment on the proposed regulations concerning termination of abandoned plans published by the Employee Benefits Security Administration (EBSA) in the Federal Register on March 10, 2005." (American Benefits Council)
Commentary: DOL Letter Warns Against Using Plan Assets to Promote Views on Public Policy Issues
Excerpt: "Alan Lebowitz, Deputy Assistant Secretary for Program Operations, EBSA, has written a letter (which you can access here) to the AFL-CIO setting forth the DOL's views regarding the ERISA violations that could occur if plan fiduciaries are involved in expending 'plan assets to inform participants about the current public debate on Social Security' as well as the 'hiring and firing of [plan] services providers based upon their opinions on Social Security reform.'" (Attorney B. Janell Grenier via BenefitsBlog.com)
Opinion: The ERISA Fiduciary Tapestry: Torn and Tangled?
Excerpt: "[The ERISA] tapestry had an uncommon quality; it was to continue the weaving process on its own. The two principles -- fiduciary management and equity jurisprudence -- were to guide the ongoing development of a 'common law' of ERISA. Some claim that this ongoing process has broken down, that the weave has become a tangled mess, and that Congress must reweave the ERISA tapestry with different kinds of threads." (401khelpcenter.com, LLC)
West Virginia Closes State's Defined Contribution Plan to New Hires as of July 1, 2005 (PDF)
2 pages. Excerpt: "[W]est Virginia has closed its teachers' defined contribution plan ... to new hires. Anyone hired on or after July 1, 2005 joins the teachers' defined benefit plan .... The total closure of the DC plan to existing participants may occur in the future. If the requisite number of participants so approve, the DC plan will merge into the DB plan in Spring 2006 and its participants will join the DB plan. If an insufficient number approve, the DC plan stays in existence." (National Council on Teacher Retirement)
More States, Including New Jersey, Want to Cut Public Pension Benefits Bill as Private Business Does
Excerpt: "The pension plan that New Jersey gives its public workers is similar to plans in most other states, but the same deal is becoming increasingly harder to find in the private sector. With many businesses saving money by switching from traditional pension systems to less expensive models, some state leaders have considered a similar change, most notably California Gov. Arnold Schwarzenegger." (Asbury Park Press)
Special Reports: The State of Pensions -- Retirees: The Haves and Have-Nots in New Jersey
Excerpt: "In an era of corporate austerity, retirees are increasingly divided into the haves and have-nots: state employees who enjoy generous pensions and lifetime health packages and private-sector workers with markedly smaller retirement benefits." (Home News Tribune)
Mexico's Commission for Retirement Savings System Approves Changes to Help Liberalize the System
Excerpt: "Under Mexico's retirement system, workers must invest a portion of their pay into an approved pension fund. CONSAR recently approved a new pension fund administrator which will offer employees several new funds. There are currently 16 administrators, six of which were added within the past two years." (Watson Wyatt Worldwide)
Chile Privatized Pensions 24 Years Ago. Now It Wants to Go Back to Social Security–Style Pensions
Excerpt: "Unfortunately for the privatizers, the World Bank, one of the primary drivers of pension reform in Latin America, has backed away from its earlier enthusiasm. In a remarkable, if carefully guarded, retreat, the bank published a report in late 2004 that owns up to deep problems in the reforms that it pushed for a decade earlier." (The American Prospect, Inc.)
Saving Incentives for Low- and Middle-Income Families: Evidence from an H&R Block Field Experiment (PDF)
36 pages. Excerpt: "This paper analyzes the effects of a large randomized field experiment, carried out with H&R Block, offering matching incentives for IRA contributions at the time of tax preparation. About 15,000 H&R Block clients, in 60 offices in predominantly low- and middle-income neighborhoods in St. Louis, were randomly offered a 20 percent match on IRA contributions, a 50 percent match, or no match (the control group). The evaluation generates two broad findings." (The Retirement Security Project via Brookings Institution)
America's Age of Retirement on the Table in Social Security Reform Debate
Excerpt: "Despite the lukewarm public reception for President Bush's Social Security proposals, Republicans in Congress are pressing ahead with plans to overhaul the system with a combination of changes that could include raising the retirement age. Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, will begin hearings on Social Security restructuring Thursday with hope of shaping a bill that would go beyond and likely modify the president's proposals." (Chicago Tribune; one-time registration required)
ABC Comments on DOL's Plan Termination Class Exemption Proposal (PDF)
9 pages. Excerpt: "The American Benefits Council ... appreciates the opportunity to comment on the proposed class exemption for services provided in connection with the termination of abandoned individual account plans published by the Employee Benefits Security Administration (EBSA) in the Federal Register on March 10, 2005." (American Benefits Council)
Comments Filed on the PBGC Proposed Rule on Electronic Premium Filing (PDF)
8 pages. The target page contains the comments received from The Northern Trust Company, the Principal Financial Group, and The American Society of Pension Professionals & Actuaries. (Pension Benefit Guaranty Corporation)
ERIC Comments to SEC Regarding Redemption Fees Imposed by Mutual Funds (PDF)
13 pages. Excerpt: "The ERISA Industry Committee ('ERIC') is pleased to submit the following comments regarding the imposition of redemption fees by mutual funds. ERIC's comments, which are summarized on pages 5 - 6, below, respond to issues raised by the Commission in the adopting release accompanying new rule 22c-2 under the Investment Company Act." (The ERISA Industry Committee)
Opinion: Labor's Capital-- Putting Pension Wealth to Work for Workers
Excerpt: "Workers' retirement dollars course through Wall Street, but most of the capital owned by working people is invested with no regard for working people or their communities.... The custodians of workers' pensions -- plan trustees and investment managers -- argue that they are bound by their 'fiduciary responsibility' to consider only narrow financial factors when making investment decisions." (Adria Scharf via HeartlandNetwork.org)
GAO Correspondence to the Honorable Bill Thomas on Options for Social Security Reform (PDF)
20 pages. Excerpt: "As you requested during my testimony before your committee on March 9, 2005, this report provides a list of the various options available to reform the Social Security program. Following this introduction is a table that lists a wide range of provisions that various proposals have used in some form. Following the table is a list of such proposals, all of which have been scored by the Social Security Administration's Office of the Chief Actuary (SSA/OCACT)." (U.S. Government Accountability Office)
Links to Items on Executive Comp, Benefits in General
Milliman's Monthly Benefit News and Developments, May 2005 Edition (PDF)
5 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits. (Milliman)
Insurer's Letter Promising a Decision in 30 Days Did Not Shorten Decision Period Set by Regulations
Excerpt: "A disability plan participant filed a claim that the insurer denied after almost six months and 17 requests for additional information. The participant appealed the denial as required by the plan and received a letter acknowledging the appeal and stating that 'under normal circumstances' the plan would decide her appeal within 30 days. The disability plan terms provided for a decision on the appeal within 60 days (or, if an extension applied, 120 days)." (Employee Benefits Institute of America Inc.)
Montana University System Excludes Many Same-Sex Couples from Obtaining Benefits
Excerpt: "Despite a court ruling that the Montana University System must provide benefits to the partners of g.ay and les.bian workers many same-sex couples remain without the insurance plans because of restrictions set in place by the plan. Last December the Montana Supreme Court ruled that the state must provide les.bian and g.ay employees of the University System with the option of purchasing health insurance and other employee benefits for their domestic partners." (365G.ay.com Newscenter)
Newly Posted Events
ASPPA Benefits Council of Greater Cincinnati: Washington Update with Brian H. Graff, Esq., APM, ASPPA Executive Director/CEO
in Kentucky on June 16, 2005
presented by ASPPA Benefits Council of Greater Cincinnati
Using Care Management Strategies to Reduce Benefit Costs and Improve Employee Health
in California on June 15, 2005
presented by Precept Human Capital Management
Newly Posted Press Releases
U. S. Labor Department Extends Annual Reports Deadline After Severe Storms Hit New York
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))
U. S. Labor Department Extends Annual Reports Deadline After Severe Storms Hit New Jersey
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))
Silver Slipper Casino Venture dba President Casino Partners with Gilsbar, Inc. to Provide Suite of Employee Benefits
(Gilsbar, Inc.)
ICC Plan Solutions Charges Into the Health Savings Account Market
(Metrics Partners)
Pension Plan Rates - Commuted Value Interest Assumptions for June 2005
(Hart Actuarial Consulting)
Newly Posted or Renewed Job Openings
Health Benefits Analyst
for The Segal Company
in AZ
Communications Consultant
for Diversified Investment Advisors
in NY
Key Account Consultant
for ING U.S. Financial Services
in IL
Relationship Manager
for Fidelity Investments
in KY
HR Strategic Research Consultant
for The Corporate Executive Board
in DC
Principal Administrative Analyst
for University of California, Office of the President
in CA
Retirement Plan Specialist
for Diversified Investment Advisors
in MD
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: