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May 11, 2005
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401(k) Investors Proceeding with Caution
Excerpt: "Fear of losing hard-earned dollars to tanking stock prices a la Enron Corp. and WorldCom Inc. could be one reason why 401(k) participation rates have modestly increased since 2002. That's according to an annual benchmark report, 'How Well Are Employees Saving and Investing in 401(k) Plans,' released Tuesday by Hewitt Associates Inc." (Chicago Tribune; one-time registration required)
Overview: Application of Final 401(k) and 401(m) Regulations to Governmental Plans (PDF)
3 pages. Excerpt: "These final regulations apply to plan years beginning on and after January 1, 2006. Plan sponsors may choose to apply the new rules to any plan year ending after December 29, 2004. However, if any of the new rules is applied before the 2006 plan year, all of the new rules must be applied. As a result, plan sponsors that see a benefit in applying any new rule before 2006, must be careful to analyze the effect of applying all other new rules at the same time." (Prudential Retirement)
Employee Ownership Update for May 10, 2005
NCEO Executive Director Corey Rosen discusses the NCEO's new survey on employee stock purchase plans, which shows continued uncertainty among companies regarding plan design; litigation on company stock in ESOPs and 401(k) plans; and Ed Lawler's argument that forced ranking of employees is a bad idea. (National Center for Employee Ownership)
United Airlines Pension Hearing Delayed, but Termination Okayed by Court; Legislation to Follow
Excerpt: "In response to UAL's moves to terminate four of the airline's pension plans, Congressmen George Miller (D-California), Jan Schakowsky (D-Illinois), Pete Stark (D-California), and Senator Ted Kennedy (D-Massachusetts) have proposed a bill called the Pension Fairness and Full Disclosure Act that would more closely link executive retirement plans to those of their workers, and would also make more details about executive payouts available to the public." (PLANSPONSOR.com; one-time registration required)
Opinion: The End of Pensions -- Defined Benefit Pensions, That Is
Excerpt: "The ratio of active to inactive workers in existing defined benefit pension plans has fallen to roughly 1-to-1, down from more than 3.5-to-1 in 1980, according to the PBGC. This retirement math is starker than that faced by the Social Security system. The PBGC now pays the pensions of more than 1 million retirees." (Forbes.com)
Audio: U.S. Government Ready to Pick Up United Airlines' Pensions
Excerpt: "Zvi Bodie explains to Robert Siegel how things would work if the Pension Benefit Guaranty Corporation does indeed take over United Airlines' pension funds. Bodie is a professor of finance at the Boston University School of Management and is a former consultant to the Pension Benefit Guaranty Corporation." (All Things Considered via National Public Radio)
ASPPA Comments on Abandoned Individual Account Plan Proposed Regulations and Class Exemption
Excerpt: "ASPPA recommends that the DOL broaden the definition of a QTA to include any current or former service provider to the plan who meets certain specified criteria designed to protect the plan. One of the protections could be that this QTA would be a joint QTA with an entity that meets the requirements of a QTA as set forth in the proposed regulation (i.e., a financial institution)." (American Society of Pension Professionals & Actuaries)
ERISA's Fiduciary Responsibility Rules and the Selecting and Monitoring of Investment Professionals (PDF)
10 pages. Excerpt: "This article addresses salient legal issues confronting plan fiduciaries today in connection with the investment of employee benefit plan assets." (Benefits & Compensation Digest)
San Diego City Attorney Urges City Employees to Relinquish Certain Retirement Benefits
Excerpt: "San Diego City Attorney Michael Aguirre on Tuesday urged city employees to follow the example of two City Council members and relinquish certain retirement benefit enhancements he deems were acquired illegally." (Union-Tribune Publishing Co.)
Americans Ahead in Pension Savings, Shows Survey Sponsored by London-Based HSBC Holdings
Excerpt: "U.S. policymakers fret about strains on Social Security as baby boomers retire and worry that Americans have prepared too little for retirement. But compared with workers worldwide, Americans appear to be ahead on the savings curve, a new survey shows. Matched only by the British, American workers are twice as likely as those in other countries to contribute to private pension plans, according to the survey, billed as the largest of its kind." (Pittsburgh Post-Gazette)
White House Plan Has Many Low-Income Social Security Beneficiaries Facing Cuts to Benefits
Excerpt: "The President's Social Security proposals have been widely reported as protecting benefits for the bottom 30 percent of the population, people earning less than $20,000 today. A document that the White House gave reporters in a press briefing on May 4, however, contains charts showing the bottom 20 percent of beneficiaries losing benefits, on average, under its plan." (Center on Budget and Policy Priorities)
Analysis: The Impact of the President's Proposal on Social Security Solvency and the Budget
Excerpt: "[T]he White House has not released the traditional analysis by the Social Security actuaries of the effect of its plan on Social Security solvency. It is standard practice for policymakers and outside analysts who present Social Security plans to provide the actuaries' analysis when, or shortly after, they release their plans. In the absence of [that] analysis ..., this analysis provides some of the standard actuarial and fiscal estimates of the President's proposal." (Center on Budget and Policy Priorities)
Comments Filed on SEC's Final Rule and Request for Additional Information on Redemption Fees (PDF)
7 pages. Excerpt: "We remain concerned about the requirement in the final rule for intermediaries to provide information to the fund, by Taxpayer Identification Number, of transactions by 'shareholders.' Any approach that requires recordkeepers to transmit data to a fund family in order to process a purchase or redemption request provides an unfair advantage to mutual fund families that also are retirement plan recordkeepers." (Profit Sharing/401(k) Council and United States Chamber of Commerce)
ASPPA Comments to PBGC on Proposed Rule on Electronic Premium Filing
Excerpt: "A. ASPPA recommends that the PBGC, rather than requiring e-filing, develop incentives that will result in the majority of filers voluntarily submitting their premium information electronically. B. If the PBGC decides to move forward with mandatory e-filing, ASPPA recommends that the PBGC take steps designed to minimize any adverse effects of the new requirement on plans and plan professionals, including an exemption for small plans." (American Society of Pension Professionals & Actuaries)
ASPPA Comments on Proposed Rule on Mutual Fund Redemption Fees for Redeemable Fund Securities
Excerpt: "On behalf of the American Society of Pension Professionals and & Actuaries (ASPPA), we thank you for this opportunity to respond to the recent request by the Securities and Exchange Commission (Commission) for additional comment in connection with the adoption of Rule 22c-2, relating to redemption fee programs." (American Society of Pension Professionals & Actuaries)
Testimony: The Potential of Personal Accounts: A Revolutionary Breakthrough in Worker Prosperity
Excerpt: "The Ryan-Sununu reform plan truly modernizes and expands the Social Security framework, to bring in real personal savings and investment for a new financial foundation for the program. Such reform really just makes good on the original promise of Social Security, when everyone thought they were really going to have individual accounts with the government that would be saved and invested. [Testimony before the U.S. Senate Finance Committee on April 26, 2005]" (Peter Ferrara via Institute for Policy Innovation)
Number of Measures Affecting Superannuation Announced in Australia's Latest Federal Budget (PDF)
2 pages. Excerpt: "In a very welcome move, the Government announced the removal of the superannuation surcharge payable on surchargable contributions and relevant termination payments with effect from 1 July 2005. Currently, the surcharge applies to individuals with adjusted taxable income in excess of $99,710, with the maximum surcharge rate affecting those with adjusted taxable income of $121,075 or higher." (Watson Wyatt Worldwide)
Links to Items on Executive Comp, Benefits in General
Automakers' Credit Ratings Hit by Employee Benefit Expenses
Excerpt: "Their pension funds could be affected in several ways. 'The downgrade on securities is likely to have a hit of up to 10% of assets,' says Jack VanDerhei, a professor at Temple University, because pension funds often invest in their own company's securities. Also, 'overall, there's a high tendency for those with below-investment grade bond status to contribute the absolute minimum legally allowed amount.'" (BenefitNews Connect)
Overview: New Bankrup.tcy Act –- Employee Benefits and Executive Compensation Provisions
Excerpt: "The Act clarifies how certain Bankrup.tcy Code rules apply to employee benefits and enhances the protection of plan benefits in bankrup.tcy and contains new restrictions on executive compensation that may be paid by an employer in (or prior to) bankrup.tcy. [The newsletter] is a summary of the Act's principal provisions affecting employee benefits and executive compensation." (McDermott Will & Emery)
Dos and Don'ts of Offering Early Retirement Options to Workers
Excerpt: "When can an employer legitimately offer older employees early retirement incentives without exposing the company to age discrimination or constructive discharge claims? That dilemma is the focus of this week's Q&A." (The City Paper Online)
Newly Posted Events
Form 5500 Preparation Workshop
in New Jersey on May 18, 2005
presented by International Society of CEBS - Northern New Jersey Chapter
Non-Qualified Deferred Compensation Basics: Foundations of Code Section 409A
Nationwide on May 26, 2005
presented by ABA Joint Committee on Employee Benefits
Newly Posted Press Releases
NDCC/SPARK Institute Takes Position on Redemption Fees; Submits Comment to SEC
(Society of Professional Administrators and Recordkeepers (SPARK))
American Express Retirement Services Introduces New Comprehensive Retirement Plan Service And Communication Model To Plan Sponsors: BluePrintSM Helps Plan Sponsors Define, Measure and Achieve Success With Their Retirement Plan
(American Express Retirement Services)
RolloverSystems Expands Automatic Rollover IRA Choices; Adds Two Safe Harbor IRA Providers to Network
(RolloverSystems)
Newly Posted or Renewed Job Openings
Employee Benefits Consultants I
for Wachovia
in VA
Compliance Analyst
for Transamerica
in CA
Retirement Plan Services Sales & Marketing Manager
for SunTrust Banks, Inc.
in GA
Retirement Plan Sales Director
for First Mercantile Trust Company
in DC, DE, MD, NC, VA
Benefits Analyst
for Barclays Global Investors
in CA
Employee Benefits Attorney
for DeWitt Ross & Stevens
in WI
Section Manager, Implementation Services
for Federated Investors
in PA
Senior Disbursement Services Associate
for Administrative Systems, Inc.
in CA
Plan Administrator
for Benefit Associates, Inc.
in CA
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